Educating Generations at the University of Illinois at Urbana-Champaign - Spring 2019 | Issue 93

Generations E DUCATI N G

at the University of Illinois at Urbana-Champaign

GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION

SPRING 2019 | ISSUE 93

Balbachs Give Back in a Major Way “When looking at our lives and professional careers, we realized we owe virtually everything to the education and support we received from the University, and we are focusing our gift on its library with the majority of our estate assets.” —Hal Balbach

One of Harold (Hal) Balbach’s lasting memories at Illinois was in the early 1960s when he and his new wife, Margaret (Peggy) Kain Balbach, went to the library in search of a dissertation printed in 1943 in France (during WWII) for Peggy’s research on paleobotany. With only a few copies in existence, they were beyond impressed when the librarian returned with not only the dissertation but a stack of related materials she thought might be helpful.

Peggy (’64) and

Over the next 50 years, Hal and Peggy learned firsthand the value of a world-class education and the vital role a premier library plays. As a result, the couple established an estate gift with the majority of their assets to help ensure the continued excellence of the University Library.

Hal (’61, ’65) Balbach

After obtaining her Ph.D., Peggy began her career as a faculty member at the U of I’s Navy Pier and Circle campus. In those years, and during stints at the Urbana campus, she co-authored and authored A Laboratory Manual for General Botany and The Plant World, which are still used today. She then moved to Eastern Illinois University and after a change in botanical emphasis, in 1973 she embarked on a long and distinguished tenure at Illinois State University. While there, she founded the horticulture-agribusiness program.

Dr. Balbach retired from ISU in 1994 and passed away in 2015.

Hal also spent time at Eastern Illinois University but then joined the U.S. Army Construction Engineering Research Laboratory (CERL) in 1972.

There he developed environmental assessment tools and undertook complex controversial environmental assessment tasks for the Army and DoD involving chemical weapons and biological warfare. Dr. Balbach has authored or co-authored more than 200 technical reports and eight textbooks and book chapters, and he has presented the results of his research around the world.

INSIDE • The “State” and Your Estate • Avoiding Probate–Free and Easy • Estate-Gift Language • Estate-Planning Pointers • Did You Know?

• Increase Your Income with a Gift • Tax-Free Gifts from Your IRA • Student Spotlight

THE “STATE” AND YOUR ESTATE One of the most important things you will ever do is identifying the people and organizations you want to be the beneficiaries of your assets. How you make those decisions varies greatly depending on your unique circumstances and significant life experiences and values. But to ensure that your decisions are honored, it is absolutely vital to express your wishes in a well-crafted and effectively executed will or trust.

If you don’t have a will or trust, your state of residence will follow set rules of how to distribute your assets. These are known as laws of intestate succession, and they vary from state to state. Leaving it up to the state almost always results in unintended outcomes and consequences as well as unnecessary expense and delay.

You will incur some expense in having a will drafted and will also need to invest a little time in communicating your desires to a competent estate attorney. Once done, however, it will be one of the wisest investments you ever made.

AVOIDING PROBATE—FREE AND EASY Most people dread the thought of their estate being held up in legal proceedings and subjected to public disclosure and associated costs of probate, which can be significant. The traditional remedy is to have an attorney draw up a living trust.

However, that, in and of itself, can be costly and time consuming.

Enter “transfer-on-death” (TOD) and “payable-on-death” (POD) plans. Use of TOD and POD plans is skyrocketing because they are a free and easy way to avoid the probate process. The most popular assets donors use to benefit their heirs and charities are bank and brokerage accounts and real estate.

To execute a POD plan, you simply request the appropriate form from your bank or brokerage firm and name the beneficiary(ies) of your account. When you die, the proceeds of the account will be distributed directly to your beneficiary(ies) without cost or delay. A TOD deed can also be executed on a piece of real estate. In this case, the property will be transferred without cost or delay to the beneficiary(ies) you named on the TOD deed. This requires the help of an attorney, of course, but is still very simple.

Contact Us or Your Advisors Today to Learn More About POD and TOD Plans!

Estate Gifts—Safe and Simple Please consider including the University in your estate plan by using the following language in your will or trust or on beneficiary-designation forms.

“I leave (e.g., % of estate, $ amount, residue) to the University of Illinois Foundation, an Illinois nonprofit corporation (37-6006007), to be used for (*fill in from options below) at the University of Illinois at Urbana-Champaign.” *financial need-based scholarships *academic merit-based scholarships *graduate fellowships *faculty research support *general support of educational programs and activities

Note: If you would like to designate your estate gift to a particular program or academic unit, please contact us to obtain further information to ensure that your wishes are carried out.

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PLANNING POINTERS

Leaving Untaxed Assets to Family Can Be Costly Did you know that when you leave untaxed assets, such as an IRA, 401(k), or taxdeferred annuity, to family or anyone else that the income tax you avoided will eventually have to be paid? This means as much as 37% could be lost, depending on the size of the account and tax bracket of your beneficiary. Furthermore, if your estate is large enough to be taxed, as much as 80% could be consumed by the combined income and estate taxes.

However, when you leave untaxed assets to a charity, such as the University of Illinois Foundation, there is $0 taxation—so 100% is preserved to be used for a purpose important to you, such as scholarships. It is for this reason that tax-wise donors leave these assets to charity and give other assets, such as real estate, stocks, and bank accounts, Did You Know… to their heirs. Like POD and TOD plans, using a beneficiary form for these assets also You can donate appreciated avoids the expense and delays of probate. property, like stocks or real

Take Care of Family AND Charity A life-income plan, such as a charitable remainder trust or a gift annuity, is a way to give a surviving loved one the security of lifetime income with the remainder passing to charity.

estate, and receive a tax deduction for its full current value. Plus, you pay $0 capital-gain tax! Considering your cost may be a fraction of the current value, your tax savings may very well exceed what you paid.

Situation: Mary would like to make a substantial charitable gift to the U of I under her will, but she is concerned that her second husband George will need income from her estate. Solution: Mary directs in her will the creation of a charitable remainder trust that will make annual payments to George for life and pay the remainder to us at his death. This gift will establish an endowment in accounting to honor Mary’s first husband who was an Illinois accounting major.

Leave a Permanent Legacy: Endow Your Annual Gift Many of our most faithful annual donors are pleased to learn they can, in effect, continue giving annually beyond their lifetimes. Here’s how: If your annual gift is $1,000, you can establish an endowed fund with $25,000 that will distribute approximately $1,000 year after year in perpetuity. You can target your endowment amount using a 4% distribution rate, which is about how much an endowment distributes each year. For example, a $250,000 endowment will distribute approximately $10,000 annually.

You can endow your annual gift while living or with an estate gift using one of the methods outlined in this newsletter. Your endowment can also grow over time due to investment returns that exceed the distribution rate. For example: If the fund distributes 4% but earns 7% annually, the extra 3% growth would double the endowment value every 24 years or so.

Use These “Planning Pointers” Now to Benefit Your Family and Charity!

Copyright © Pentera, Inc. All rights reserved. Please consult your attorney regarding any legal information contained herein.

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Increase Your Income with a Gift Lock in guaranteed lifetime income with a gift annuity AND enjoy these additional benefits!

• Help educate future generations • Avoidance of capital-gain tax • Immediate income-tax savings • Tax-free income potential • Convert risky stocks to guaranteed income

ONE LIFE Age Rate

TWO LIVES Ages Rate

65

5.1%

65–65

4.5%

80 85

7.3% 8.3%

80–80 85–85

6.2% 7.3%

IMPORTANT: DO MOVE the FIM and POSTNET barcodes. The 70 NOT ENLARGE, 5.6%REDUCE OR 70–70 5.0% Special care must actual size AND placed 75 be taken to ensure 6.2% FIM and POSTNET 75–75 barcode are 5.5% to meet both USPS regulations and automation compatibility standards.

Go to www.uif.giftplans.org to check your annuity rate.

NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES

BUSINESS REPLY MAIL FIRST-CLASS MAIL

PERMIT NO 144

URBANA IL

POSTAGE WILL BE PAID BY ADDRESSEE

HARKER HALL MC-386 UNIVERSITY OF ILLINOIS FOUNDATION 1305 W GREEN ST URBANA IL 61801-9934

Artwork for User Defined (3.75" x 5") Layout: sample BRM Env with IMB.lyt April 29, 2011

ROLLOVER! Good IRA

Produced by DAZzle Designer, Version 9.0.0 (c) 1993-2009, Endicia, www.Endicia.com U.S. Postal Service, Serial #

Direct gifts from your IRA to benefit the University can: 1. Be an easy and convenient way to make a gift from one of your major assets.

2. Be excluded from your gross income: a tax-free rollover.

3. Count toward your required minimum distribution.

For your gift to qualify: • You must be 70½ or older at the time of your gift.

• The transfer must go directly from your IRA to the University of Illinois Foundation.

• Your total IRA gift(s) cannot exceed $100,000.

• Your gift cannot result in anything of value in return, such as income or athletic ticket preference.

STUDENT SPOTLIGHT

“I never would have been able to attend the University of Illinois had it not been for the scholarships, and I’m so thankful.”

—Rachael Bolek, Senior Journalism, College of Media Recipient of the Marilyn Miller Kaytor Scholarship and the Richard Tuttle Orr Scholarship

PLEASE SEPARATE THE CARD BELOW AND RETURN!

Please send me the following guide(s): n Planning Your Will for All It’s Worth n Giving Appreciated Property: How to Get the Most Out of It n Income for Life: The Charitable Gift Annuity (CGA) n Please provide me/us a personalized, no-obligation CGA illustration based on the following information: Gift being considered: $___________ Age 1: ______ Age 2: ______ Annuity payments deferred until (if applicable): ___/___/___ n I would like information about using my IRA to make tax-free gifts. n I would like to notify you that I have already included the University of Illinois in my estate plan.

DETACH HERE

n Please contact me to discuss my options.

PLEASE FOLD ON THIS SCORE AND TAPE CLOSED BEFORE MAILING.

NAME

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Request your complimentary guide online at www.uif.giftplans.org/YourWill or return the attached reply card.

§ Provide flexibility for family circumstances.

§ Decide whether to add a trust to your will.

§ Choose the specific type of bequest that is best for your family.

§ Plan your bequest to meet your charitable objectives.

Make sure you decide who will receive your assets. Our complimentary guide, Planning Your Will for All It’s Worth, explains how you can:

Request Your Complimentary Guide to Start Planning Your Will Today!

Office of Gift Planning and Trust Services University of Illinois Foundation 1305 W. Green St., Rm. 214 Urbana, IL 61801-2962

www.uif.giftplans.org

Jeff W. Roley Associate Vice President for Gift Planning and Director of Planned Gift Marketing (217) 244-0473 GPInfo@uif.uillinois.edu

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