Estate & Legacy Planning Seminar

The Detroit Area Council will be hosting an
Estate & Legacy Planning Seminar
Featuring…

Russell McNamer
Legal Endowment Counsel
For the
Boy Scouts of America

The seminar will highlight
Current trends in Tax & Estate Planning
How to create a legacy for you and your family

You are invited to attend
January 30, 2007
Dauch Scout Center

12:00 – 1:30 p.m. or 7:00 – 8:30 p.m.

Register by January 25, 2007
Contact Chuck Lang
Director of Development
313-361-1250

Help yourself and those you love by ensuring
That your estate plan is complete

Preventing the Ultimate Identity Theft

IRS Changes Mandate an IRA Review

In January 2001 the IRS issued sweeping new rules for IRA accounts. The changes affect every IRA owner and offer significant new withdrawal and beneficiary designation opportunities.First, a short review. There are three stages in the life of every IRA account.In stage one the account owner is accumulating assets for retirement needs and they are growing completely tax-free. The second stage begins at age 59 ½ when the IRA owner may begin voluntary withdrawals or continue to grow the account. If the IRA assets are not required to meet retirement needs, the account may continue to grow tax-free until the owner’s age 70 ½. In the third stage, or the minimum required distribution (MRD) stage, the owner must begin withdrawals. The required withdrawals must begin by April 1 after the owner turns age 70 ½. If withdrawals do not meet the minimum requirements, there is a 50% penalty imposed.A new simple uniform withdrawal table is used for all participants, regardless of the number, age or relationship of the designated beneficiaries to the account owner.It has never been easier to include, change, or update charity as a beneficiary of your IRA account. It is tax smart to consider charity as a beneficiary of your IRA account Now it’s easy to include a local Scout council and/or other charities as a full or partial beneficiary of your account. You may include more than one charity and may stipulate a set dollar amount or a percentage of the account value. You may include charity and other family members. The possibilities are endless and a personal decision for each person.For example, Mrs. Wilson is age 80 and has three IRA accounts. She has her son as beneficiary of one account, her daughter as beneficiary of the second account and their local council as the beneficiary of the third account. If she had just one IRA account, she could have selected to leave her son 1/3 of the account value, her daughter 1/3 of the account value, and the council 1/3 of the account value. The choice is hers, and it no longer affects the amount she is required to withdraw from the account.Upon the death of the IRA owner, when the beneficiary is other than the owner’s spouse, the account may be subject to tow taxes. The accumulated income tax will be taxed to the beneficiary, and if the estate is large enough, the IRA will be included and subject to the Federal and state estate tax. This may mean that the IRA account is depleted by as much as 50% to 75%. A gift of IRA assets to charity eliminates both the income and estate tax.

Now is a good time to check how the new IRA regulations affect your account. Now is a good time to review and update the beneficiary designation for your IRA accounts.

For more detailed information, contact Chuck Lang, Director of Development, at (313) 361-1250.

Charitable Lead Trusts

Time To Review Your Will?

What if you bought a new car and never cleaned or repaired it? What if you never landscaped your yard or repainted your house? You would own a car or a house that looked like a lot of people’s wills.

Having any kind of a will is better than no will at all. But updating your will gives maximum protection to you, your family, and the organizations you support. Has your estate grown? Has your martial and family situation changed? Have you moved to another state? Have tax laws or your preferences and charitable interests changed? If so, you need to update your will.

For more information on wills, bequests, and how you can best provide for Scouting by updating your will, visit www.dacbsa.org  on the Internet or contact Chuck Lang at clang@dacbsa.org . With a small amount of work, the things most important to you can look as good as new again.

Preparing for Retirement?

A Scout working on the Mammal study merit badge might see a squirrel stashing acorns for the winter. Too bad the squirrel can’t get a BSA charitable gift annuity. With a gift annuity, humans can give cash or stock to Scouting and expect immediate income of up to 11.3 percent; charitable performance in a financial asset. To learn more about charitable gift annuities, call Chuck Lang at (313) 361-1250. After all, some mammals must plan for retirement by hoarding assets, but you can prepare by giving them away. Be prepared.

Who Will Inherit Your Values?

Life is a series of experiences. Beginning with birth ad youth, we have moved through a continuum of life experiences – school, adolescence, college, adulthood, job marriage, family and possible retirement. Throughout our life, people have been the key to our development - parents, family, teachers, friends, youth leaders, business associates. All have contributed to who we have become. Today, our life is a statement of who we are.

• Your values define your life! Passing your values on is an important proves and one that requires serious thought.
• What do you believe in?
• Who are the people and organizations that have influenced your life and the lives of your children?
• What kind of legacy do you want to leave? How can you "Touch the Future"?

You can "Touch the Future" by deciding how best to transfer your assets to children and family during your lifetime as well as at death. This critical process is referred to as Estate Planning, for without it you could lose a sizable portion of your estate to taxes. While avoiding unnecessary taxation is an obvious motive, perhaps a greater reason for estate planning lies in the opportunity to transfer your values to future generations.

To assist you in accomplishing your objectives, contact Chuck Lang at our Development Office. His services are available to you offered in the spirit of the Boy Scout Good Turn.

"Touch The Future" with Detroit Area Council’s

If you would like to "Touch the Future", information can be sent to you regarding the following:

• How can I include the council in my "will" to "Touch the Future".
• How I can include the Council in my estate without having to change my will.
• The benefit of a gift annuity that will pay you and/or your spouse an attractive annual income for life ranging from 6.1% to 12% depending on age.
• Why I might consider an insurance policy as a way to endow Scouting.
• The benefits of including a Charitable Remainder Trust in my estate plan.

Contact Chuck Lang by email at clang@dacbsa.org   OR

call (313) 361-1250   OR

Mail your request to Development Office, BSA, 1776 W. Warren Avenue, Detroit, MI 48208

ANNUITIES BOUNCE BACK!

 
With the Stock Market In a Download Drift, Fixed Annuities Are Back In A Big Way

Back when the stock market was still defying gravity, fixed annuities were a tough sell. But with the market’s depressing slide, sales of fixed annuities have skyrocketed, with Americans pouring more than $50 billion into them in the first half of 2002 alone.

“The stock market hasn’t bounced back, and people have lost their nerve and are running to safety,” says John Wesley of TIAA-CREF, the nation’s top seller of annuities. After looking at the interest rates on certificates of deposit (CDs) and money market accounts, he says, they’re turning to fixed annuities.

Annuities are investment contracts with insurance companies that many buyers use for retirement income. The two types of annuities offer fixed interest rates: deferred fixed annuities and immediate fixed annuities. (See Graph) Both of can be appropriate for older, conservative investors who are looking for higher, stable returns as well as tax benefits.

Variable annuities, so called because the returns fluctuate, offer little in the way of advantages for retirement–minded investors. They often are larded with hidden fees and penalties, and withdrawals are subject to ordinary income taxes.

DEFERRED FIXED ANNUITIES

Deferred fixed annuities, which are being widely promoted as an alternative to CD’s, typically advertise higher interest rates than CD’s. It’s important, though, to understand how they differ from CDs

Issuers of fixed annuities guarantee an interest an interest rate for a specified period. The interest grows tax deferred-you don’t pay taxes on it until you start drawing form the annuity. CDs don’t enjoy this tax perk.

The penalties for an early withdrawal from a fixed annuity can be more painful than an early exit from a CD. Almost all fixed annuities carry surrender charges that typically start at 6 or 7 percent and decline by a percentage point a year. Making a withdrawal from a fixed annuity if you are under age 59 ½ can trigger a federal penalty of 10 percent.

Because fixed annuities are insurance products, Joseph Rosanswank, publisher of Comparative Annuity Reports, suggests sticking with issuers that have at least an “A” rating from A.M. Best Co.

If a fixed annuity sounds attractive, Glenn Daily, a fee-only insurance consultant in New York City, suggests that you zero in on CD type fixed annuities. Like CDs, these annuities offer a guaranteed fixed interest rate for a specified period. If a five-year CD-type annuity offers an interest rate of 5.1 percent, for example, you’ll receive that rate for five years. What’s more, once the five years are over the annuity’s surrender charge expires.

In contrast, traditional fixed annuities typically guarantee an interest rate for only one year. Some offer tantalizing high rates for the first year, but then the rates drop-sometimes sharply. Worse yet, surrender charges can keep buyer chained to them.

“I tell people to stay away fixed annuities that have a guarantee period that ends before the surrender charge period does,” daily says. “It’s not wise to put yourself at the mercy of insurance companies.”

Shopping for fixed annuities is relatively simple. There’s no need to worry about comparing expenses, because costs have already been deducted form an annuity’s quoted interest rate. Daily recommends using TIAA-CREF’s Personal Annuity Select Fixed Account as a benchmark when comparing quotes. (This annuity is unusual in that it has no surrender charge.)

IMMEDIATE ANNUITIES
Traditionally, immediate annuities have been about as popular as a blaring car alarm. But with the prolonged bear market, sales of these annuities have also surged upward. There are two basic choices: fixed (the more popular variety lately) or variable.

With a fixed immediate annuity, n insurance company typically agrees to send a buyer a check each month-no matter long he or she lives. The income is partly protected from taxes. With a variable immediate annuity, the monthly check fluctuates with the underlying mutual funds or other investments that the buyer has chosen.

Either type of immediate annuity, or a combination of both, can be an attractive option for an individual whose only regular source of monthly income is Social Security. “Immediate annuities re mostly for people who are looking to create a larger income flow than what they are currently receiving from a pension, Social Security or other investments, “says Harsh Stern, publisher of Annuity Shopper.

Experts warn against sinking an entire nest egg into an immediate annuity. (You usually can’t get it back.)
What’s more, these annuities offer no protection against inflation. Immediate annuities, experts say, can fill the gap between a retiree’s projected living expenses and regular sources of income, such as Social Security and a pension.

With fixed immediate annuities, as with deferred fixed annuities, expenses are already subtracted from the quoted monthly payments. With variable immediate annuities, how ever, buyers should pay attention to fees and other costs. Many people shy away from immediate annuities out of the fear that if they die prematurely, the insurance company will reap a windfall. But Farrell Dolan of Fidelity Investments Life Insurance Co., the nation’s top seller of immediate annuities, points out they can be structured to guarantee payments for five, 10, 15 or even 20 years.

Insurance companies are also addressing the fear factor by rolling out flexible immediate annuities.

Consider the Choices
While conservative annuity choices have become more popular since the stock market meltdown, experts say it’s important not to put all your money in fixed income investments. This is all the more true with interest rates at historic lows.

For additional information, please contact Chuck Lang, Director of Development at the Detroit Area Council Development Office at (313) 897-1965, ext. 250 or by fax to (313) 897-2083.

Do You Have A Will?

Benefits

• Lets you provide for your family after your death
• Allow you to distribute your assets according to your wishes
• Saves on estate taxes, with proper planning
• Lets you leave a legacy without giving up assets now

Have you put off making or updating your will? Maybe you think it costs too much to make a will. Perhaps you’re having a hard time deciding about how to leave your money. Or you may simply have an aversion to confronting your mortality.

Drafting a will may seem like a headache at first, until you realize all the good that comes from having one.

A bequest in your will let you pass any amount you wish to use free of estate tax. You can give cash or specific property, a dollar amount or a percentage of your estate, with restrictions or without.

Whether you are married, single widowed, or divorced, you need a will. Without one, your estate will not be distributed to those family members and organizations that you care about. Instead, the state will decide who gets your estate, and also keep a sizable chunk of it for itself. Without a will, the state will also decide who will take care of your young children when you are gone.

Without a will, not only will your family and friends suffer, but also your church, your schools, and Scouting. Your bequest gift can make a real difference in the financial future of a council as well as the other organizations that are so important to you and your family. Call us for more information on the importance of a will and what it can mean to you.

After all, you spent a lifetime building your estate. It’s time to take a few minutes to protect that estate. Designing a will that benefits your family, friends and organizations you care about most requires a small investment of time to direct your estate assets properly. After all you spent a lifetime building your estate. We think it is in keeping with the Boy Scout motto…"Be Prepared". For more information, contact Chuck Lang, Director of Development at 313-361-1250.

Download the Endowment Information Request

Learn more about How to Make a Will that Works.

What's Your Percent

Many Scouters have thought about leaving a legacy by including Scouting in their will, but are not exactly sure what to do at this time. This was true when I met with George and Isobel, both in their early fifties and parents of four grown children.

They want to leave as much as possible to the kids and at the same time do something for Scouting. Their assets were modest, so there would not be Federal Inheritance tax. We searched for the best way that achieved their objectives.

At first, they thought they would designate a dollar amount in their will, but changed their mind because it would be difficult to know the estate size at the time of the second death. They also considered making the endowment fund the beneficiary of a group life insurance policy, but that would change in value upon retirement.

They decided to leave five percent of their total assets to Scouting through their will, recognizing that if their circumstances warranted it, they could change their will. They were not anxious to redo their will at this time, so they decided to use a codicil; that is an addition to their will. The council has codicils, available, and they are simple to complete. You must have two witnesses, who by their signature on your codicil witness to your signing, not what you have written. You simply mail the codicil to your attorney.

Oh, by the way let the Scout Executive know that you have included Scouting in your will, so he can include you as a Heritage Society member.

George, commenting on his gift said, "All my kids can use the money, but not one would miss five percent." Is a percent a good way for you?

Contact Chuck Lang our Development Director to explore this opportunity.

Download the Endowment Information Request

Learn more about How to Make a Will that Works.

Last Edited March 05, 2007