|Quote for today: It takes 16 times more financial investment to attract a new customer than it does to keep an existing customer...(John Sculley, former head of Apple Computer)|
See the helpful PDF flie of my Family Document Locater form for a method to obtain important information.
Gift Annuity with Life Insurance Gift annuity agreements can work for donors in interesting ways. I have just completed a comparison of how much life insurance can be purchased with the after tax income generated by a gift annuity agreement. Gift annuities can provide considerable leverage for donors who can obtain life insurance. The purpose of his exercise was to first determine the cost of replacing the a $100,000 gift. The second purpose was to determine how much additional insurance could be purchased by a qualified donor using all of the annuity after tax income.
I have created four Power Point slides to illustrate the advantages of this approach. Print the slide out in note form to obtain the commentary for each slide.
Since many charities have annuities which were established under previous rate schedules the after tax benefits from those agreements should be higher than what is listed on the current slides. When you have a donor whose personal portfolio has decreased and they are concerned about the amount of their legacy to a spouse or family, and if they are insurable this concept should work for them.
This is a new section where I will be highlighting some gift expectancies and gift program elements I think will be helpful and informative.
Kudos to Erik Whaley, Executive Director and Chief Development Officer of The Tuomey Foundation, Sumpter, SC for his first charitable gift annuity agreement. It was a stock funded annuity for a couple age 65, 66 with a 5.0% payout. Considering the size of the gift and the life expectancy of the donors it was decided to reinsure the payment with a commercial company. With the assistance of an investment advisor member of the Planned Gift Advisory Board this was accomplished with an insurance company which would accept the Foundation as a non-natural owner. The Foundation has launched a new web site and will shortly incorporate planned giving web content with Future Focus.
Kudos to Sharon Jones, CFRE, Vice President for Development and John Wilbur, Major Gifts Officer, HPC Healthcare, Inc. Temple Terrace, Florida. HPC is the parent corporation for LifePath Hospice and Good Shepherd Hospice.
John obtained the third annuity from a couple now aged 81 and 85. Even though this annuity was written at a lesser rate than previous annuity agreement due to the recent rate changes the couple experienced a dramatic increase in income (6.60%) when compared to the effective return from a certificate of deposit. It points out your current annuitants are your best prospect for further support.
Sharon obtained an initial annuity from a couple aged 82 and 85 with a stock gift of 1,000 shares of Cisco Systems. The discussion with the annuitants started over 12 months ago and they were waiting for their stock to rise over $20 per share which happened during the recent market rise. They had all the information available for their broker to make a quick DTC transfer and in spite of their summering in Michigan the annuity was completed within a few days. The stock with a cost basis of $5,025 and a value of $21,235 indicates there are still individuals with appreciated securities who will benefit from a gift annuity since the Cisco stock does not pay a dividend they increased their income from $0 to over $1,400 annually.
Big Financial Changes for Retirees in 2010 - Courtesy of Dick Kellogg, www.futurefocus.net and Yahoo Finance
Higher Medicare Advantage costs. If you're one of more than 10 million subscribers to Medicare Advantage (NYSE: MA - News) plans, expect to pay more for coverage next year. The U.S. Centers for Medicare and Medicaid Services cut 2010 subsidies to private MA plans by 4 percent to 4.5 percent. Big private insurers offering the plans will be figuring out how to adjust to the reductions, but you can expect to see a combination of higher rates and drug costs along with reduced coverages. The plans were created by the Bush administration as a private-sector alternative to traditional Medicare plans. But MA costs the government about 14 percent more per person than regular Medicare, and thus became a target for expense cuts that could be used to help pay for theObama Administration's health reform plan.
Estate tax changes. Under current law, there is no estate tax next year. But in 2011, it reverts to the 2001 level, with tax rates of up to 55 percent on all but the first $1 million of an estate. No one thinks this approach will prevail. Democrats want this year's estate taxes to be made permanent. This would exempt the first $3.5 million and levy tax rates of up to 45 percent on the rest. Estate taxes have long been an ideological battleground and nothing less than rhetorical war should be expected as President Obama's tax-reform tax force develops recommendations that are due at the White House by early December. __________________________________________________
Excellent Postcard Tag Line
Just received a post card from Humana the major health insurance with an excellent tag line and comments that easily transfer to gift annuity promotions. Tag Line...Securing your Tomorrow Today. Copy...In a world of constant change, one of your biggest concerns is providing a secure future for yourself and your family. Change the last two words to read... and our charity.
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