 Good morning everyone or whatever time of date is wherever you are in the world. My name is Emily Ho and I'm the director of the Linus Pauling Institute at Oregon State University. We are doing things a little bit different today, a little bit different than our usual scientific webinars. The Linus Pauling Institute represents the lasting legacy of Dr. Linus Pauling that was made possible by many, many supporters with a shared passion for health. So we wanted to create a resource for you for your financial health and help you create your legacy. This webinar is happening with the expertise of our friends and colleagues at the OSU Foundation who are experts in this area and will help you explore the benefits of charitable estate planning. And this is in support of any nonprofit organization that that fuels your passion. Joining us today are Audrey Anderson and Stephanie Zeno from the foundation and I will pass the reins on to them. Welcome Audrey and Stephanie. Oh, thank you. I forgot to unmute. Thank you Emily for that lovely introduction. And thank you to all of our attendees who are joining us today to learn a little bit more about how to create your legacy through philanthropic estate planning. Presenting today are myself and my colleague Stephanie Zeno. We are both directors of development in the Office of Gift Planning at the OSU Foundation. And we are two of four staff in this office who work directly with donors and our colleagues at the foundation as well as our campus partners to help our donors make lovely gifts to the organizing or the programs that they're most passionate about. And before we dive in, I want to invite all of you to use the question and answer feature at the bottom of your screen to submit your questions. Stephanie will either respond in the Q&A feature or read them aloud as appropriate and we've set aside some time at the end of today's webinar to have a live Q&A. And this presentation will be recorded or is being recorded and will be available to you. We will clip out the Q&A section at the end of the presentation so feel free to ask your questions freely they will not be broadcasted. In today's agenda we'll cover a portion of estate planning which is focused primarily on how to use philanthropy in smart and creative ways to accomplish multiple goals. We'll first talk about a framework that you can use for thinking about your goals and plans in a holistic way, which can be really helpful if you're starting out for the first time but also if you're updating existing plans. And then we'll talk through some gift options that have unique tax benefits and can be used in strategic ways to benefit you, your loved ones and your favorite organizations. And of course how you can partner with gift planning and use us as a resource in your planning process. We're here today because you have a connection with the Linus Pauling Institute at OSU, and we're all very aware of Dr. Pauling's wonderful legacy in the field of science and activism. But he also has a very specific and important legacy here at Oregon State, both he and his late wife Eva met here at Oregon State when it was formerly known as Oregon Agricultural College, and they were married for almost 60 years. When Eva passed away in the early 80s, OSU established the Pauling Peace Lecture in her honor that still continues today. And then after Linus passed away, the assets that were formerly part of his Institute of Science and Medicine were transferred to Oregon State and are now the LPI that you are familiar with. And then also in 2001 LPI created the Eva Helen Pauling Endowed Chair. So you can see there's a lot of legacy at OSU with the Paulings. So you've heard gift planning mentioned a few times already but let me define it for you. Gift planning is the process of developing a legacy plan that meets your personal financial and philanthropic goals, while reflecting your values and passions. So we in the office of gift planning partner with our donors and advisors to consider gifts that are tax wise, and which are best for the donor, their family and loved ones, as well as the programs are passionate about. We specialize primarily in complex assets to think non cash assets and structured gift plans. So where do you start, it can be useful to go back to those first principles and identify what matters most to you. Many of us don't know when our time will come so it can be difficult to know how to plan for what might be left over in our estate. So a good place to start is to really think through your goals and priorities for your own financial security. Second, consider what you want for your loved ones, family, friends, caretakers and other important people in your life. Third, identify your values, causes, passions and important institutions that you hope will continue well after you're gone. You'll likely find that these areas have a lot of overlap, which can be really helpful inform your careful planning process. We always encourage everyone to seek trusted legal and financial counsel, but we know these visits with attorneys can be somewhat spendy so to make the most of your time to be helpful to think through some of these planning questions in advance. So starting with your financial security. Ask yourself what are your retirement income needs and what's do you have your long term healthcare costs address. Do you have any diversification or concentration issues, especially as you're transitioning from your income earning years to living off of your assets. When looking at your assets do you have any non income generating assets or underperforming assets that need to be addressed. What are your retirement plans. Do you have qualified retirement plans such as IRAs 401ks 403 B's Ross, Social Security income. It's good to look at all of your income sources, and then ask yourself our income tax is a concern or a ste or transfer taxes. Do you have a plan for your personal residents, residents, maybe vacation homes or other land that's in your portfolio. Family business are you considering selling that family business to employees or transferring it to the next generation. And then what do you hope for your loved ones, how much to get your loved ones, when do some of your children, but they benefit more from gifts during your lifetime. Are these equal or equitable, equitable gifts, do you have a child who's a successful entrepreneur and another who's a public school teacher. Do you have your loved ones assets or the use of assets such as creating a trust that provide income to your heirs for their lifetime. Are you do you have any concerns with how your heirs would use your assets. Maybe you want to restrict those assets just for educational purposes for example. And then what assets to give as we'll discuss a little later, there are different tax treatments for various assets, and when and how they transfer. So that's another consideration to think about. And then of course, do you have anyone in your family who may have special care needs and a benefit from perhaps a special needs trust. And then think through what your wealth transferring plans are for future generations and just grandkids and great grandkids. What are your values. What would you like to do with your money that would be the most meaningful to you. What organizations have been important part of your life other organizations doing work that reflects what you care about most. Do you want to create a legacy fund, perhaps an endowed fund that will exist in perpetuity, one that other family and friends can contribute to over time. Or will honor a family member or another porn person. And of course, giving is joyful. So whether you do that now or at the end of your life those plans will bring you joy as you think about the difference you can make. Next of course is thinking through what's included in your estate plan, your assets. You can know what assets you have in your state and to have a complete picture assets can have different tax treatments when given during your life or a death, as well as to your spouse children or charities. They also transfer differently. Some transfer by will or trust and others who beneficiary designation, which of course leads us to putting your plans into place in order to accomplish your goals. You'll need to create an estate plan with the necessary documents to ensure that your assets are transferred efficiently and according to your wishes. If you pass away without a valid will or other appropriate instruments such as a trust, then you'll have considered to be passed in test aid, and your assets will be distributed, not according to your wishes but to your state succession statues. If you want to leave a bequest for distant relatives, friends, caretakers, excuse me caretakers or charities, then you will need to create the appropriate planning document. These are some of the most common forms of planning documents that you'll run into. I won't spend a lot of time here due to time. But again, this is where trusted legal counsel and financial advising is so helpful so you can create a custom estate plan that needs all of your needs. So let's talk about smart philanthropy and the charitable gifts that you can use to achieve multiple goals both now and into the future. There are so many ways to give to LPI and your other favorite organizations. On this slide I've included some of the most common and popular gifts listed on the left here from the most immediate impact to future impact. And this impact refers to both the impact your gift will have on your benefiting organizations such as LPI, but also the impact that gift will have on you as a donor, the benefits you'll receive and some of the tax incentives associated with those giving vehicles. I'm going to discuss these at sort of a high level and then Stephanie will delve deeper into how these gifts can be used strategically and with a few examples. So let's start here on the left with outright gifts. So perhaps you'd like to support some cutting end research or be a part of a program that's getting off the ground right now. And perhaps you have had a really high income earning year and so you would benefit from a charitable tax deduction, you might be thinking about an outright gift. But before you look to your checking account. Maybe wise to consider other assets that you might own that you give instead, primarily appreciated property such as stock. So there are two benefits to giving appreciated property. The first is that your gift would qualify for a charitable income tax deduction for the full fair market value of that property. Second, the capital gains tax that would be otherwise do on that gift if you sold it outright this associated with the appreciation of that property since the day that you purchased it. That capital gains tax is actually forgiven. So for example, if you bought $10,000 worth of stock 15 years ago, and it's now valued at $100,000, you could give those shares directly to the OSU foundation. So if you wanted to qualify, excuse me, a charitable deduction for $100,000, your gift would have an impact of $100,000, and you wouldn't have to pay capital gains tax on that $90,000 of appreciation. Another type of appreciated property of course that might be on all of our minds right now is real estate. Now all organizations are set up to accept outright gifts of real estate, but the OSU foundation has had a lot of experience accepting gifts of real estate. And there's also other ways you can give real estate so it's worth considering. It does take a little bit of thoughtful planning, as it can be more complex and we want to make sure that it's the right gift for you as well as the foundation. As I mentioned, there's a lot of appreciation in real estate right now, so it's certainly something to consider. And for those of you who are age 70 and half or better, there's also an opportunity to make a direct gift from your IRA, this is called a qualified charitable distribution. And while these qualified charitable distributions don't qualify for a charitable deduction, those transfers are excluded from your taxable income. So that can be a great way to get the most bang from your charitable dollar if you say for example don't itemize your taxes or you've maxed out on your tax deductions for a given year. Next we have life income gifts. So if you're concerned about needing your assets during your lifetime, and perhaps you could benefit from some additional cash flow, a life income gift might be a great win-win solution for you. This is a gift plan where a donor makes a gift of cash stock or even real estate to create an annuity or trust, and in return you receive an income stream for life or term of years. This income stream can be for you or a loved one, and in some cases these income payments actually have preferential tax treatment. The individual of whatever is left over in the annuity of the trust at the end of your life where the term of years becomes a wonderful gift for LPI. And that gift would be used according to your wishes, usually outlined in a statement of intent or some other document created during your life. And charitable remainder trusts are especially popular right now because they can be funded with gifts of real estate. So those gifts of real estate can be transferred tax-free to trust and sell those that real estate tax-free, and the proceeds invested into a trust and mixed portfolio, which can then make payments to income beneficiaries such as yourself or loved ones. And Stephanie will go into a couple of examples later on the presentation. For example, perhaps you live in your home and you have plans to live in there for as long as possible. You don't have plans to bequeath your house to children or other heirs, and you really prefer that your executor not have to manage the sale of your house after you're gone. And you might benefit from an income deduction. With a retained life estate, you can donate your house during your lifetime to the Orden State Foundation, but retain the right to live in it for the rest of your life or until you're ready to move. You would continue to manage the house like you do normally, and you'd receive an immediate income tax deduction for the value that's associated with the charitable portion of the gift. And then once you move or pass away, then the house is available to the foundation to be used either perhaps sell it and use the proceeds for a purpose that you've determined in advance or perhaps retain the property to be used for some purpose such as faculty housing. And then last but certainly not least are requests, which I'm sure are a way you think of when you consider legacy giving and for good reason, these are gifts that cost you nothing now. And so if you have concerns about outliving your assets or you want to have access and control over your assets during your lifetime, should you need them, then bequest are a wonderful way to give make gifts after you no longer need your resources. And of course there's lots of flexibility you can change your will or trust or beneficiary designation forms at any point. So these gifts transfer through will trust or beneficiary designation form and they will transfer to the foundation tax free and are also excluded from your taxable estate. So, all of these gifts, typically, even though the impact might be well in the future, careful and thoughtful planning now will ensure that they are used exactly as you wish. And legacy gifts are often the most personal and most general generous gifts many donors make to any organization, and they are truly vital to the future success of LPI, Oregon State and the nonprofits that you care about. So I'll pause here before I turn this over to my colleague Stephanie to see if there's any questions that I can answer. Audrey we don't have any in the Q&A feature yet. Okay, terrific, we'll save them to the end then. Stephanie, I'm going to go ahead and stop sharing and let you take it from here. Thanks everyone. Great. Thank you so much for joining us today. As I've said, or as Audrey has said I'm Stephanie Zeno I'm sort of the, the other half of the director developments of gift planning. We have other members of our office and a more senior level but Audrey and I are the two that are actually based out of the Portland office. We are frequently down in Corvallis but we also have been get to enjoy the bigger city so I'm going to do a deeper dive into some of the gift options that Audrey presented. So let's start with life income gifts. Life income gifts actually function in a circular motion. Right, so they work in that a donor gives the asset to a trust or a charitable gift annuity. That trust or gift annuity will pay the donor an income, sorry an income stream, and there are some benefits associated with this so when you give an asset to a charitable gift annuity or a charitable remainder trust. The donor receives an income tax deduction, and it's a partial income tax deduction. And I think that's really important for people to remember, because you're going to actually get income payments from this gift. So the income tax deduction is for what we estimate the remaining value of the charitable gift annuity or the charitable remainder trust will be when the trust rooms ends or the gift annuity terminates and I'll get into that in a little bit. And there are some other benefits as well. If you give appreciated assets. This is a great way to reduce your tax on capital gain, some of these income payments portions will actually be capital gain taxes but that's actually okay, because income capital gains or tax at a preferential rate as opposed to ordinary income so you can actually have an income payment that has different levels of taxation. And this could actually be better than just getting you know a paycheck that's fully ordinary income. And the third thing that I want to highlight is that you can have fixed or variable payments and this actually is a function of the type of gift that you choose. The charitable gift annuity is actually a contract that is established between yourself and the organization. The payout rate that you receive, or whoever you should choose is based on your age, so the income beneficiary this age it's often the donor so let's just assume that. So, that becomes a specific rate, we use rates that are set by the American Council of gift annuities which is essentially what 99% of the nonprofits in the country use. And that rate determines you know, it could be 5.6% of the original gift annuity amount. And so you will know what the exact dollar amount you will receive. Quarterly for the rest of your life because charitable gift annuities continue until a person passes away. But I mean there is no in date before that they are for a lifetime. So that's a great fixed payment option. A charitable remainder trust, however, is a little bit more flexible. And to be quite honest there are some of my favorite gifts to work on because they're just. in so many fantastic ways. But charitable remainder trust function, generally, especially with unit trust, which is the most common amount by a percentage based on the trust principle as valued annually. So, what that means is the trust contract will say oh say 5%. So, because of the trust principle on January one, that's the income payment that will be received by the the income beneficiaries for that year. So because that 5% is of the principle on January one of each year, that payment rate, or that payment amount actually will rise and fall with inflation. You know, if the trust is doing really well and you know the stock market's really surging you could have a very high payment year that's great. That also means that the trust value could fall because it is going to be invested in a very portfolio. We actually request donors on that to help them choose the best option. So, that's an option if you choose to have something that's a little more of a hedge against inflation. So, why would you consider a life income gift. Well, there's a lot of reason actually. Often people use them as part of their retirement planning process you know they'll look at their assets and they may say oh I've got a pension or get social security and I have other retirement accounts and I've got a hole. And I want to, I want to either create a steady fixed stream of income that is sort of a safety net for me, or, you know I've got a lot of assets that are already in that steady fixed stream of income and I want something that could rise and fall with the market. So this is a way that you can sort of fill in the gaps. And it helps you create a gift that you know you can actually get an income tax deduction, create it now you know maybe you're in your, your early 60s late 50s still working. You're still in your high peak earning years, and you could use an income tax deduction now. So, you know you have the option of creating this gift and then it essentially sits on a shelf until you reach a certain age often people do it for 65 when they reach their retirement age, and then the payments kick in so now you're getting you're getting an immediate tax deduction when you really need it, but then you're getting this payments in the years when you're not having that income stream from from your, your employment so to speak. It can also be used for business accession planning we have seen people put in shares of LLCs and things of that nature as a way to sort of divest themselves from their personally owned business and pass it down to the next generation or pass it down to employees. You can use it to create a steady income stream for loved ones. You can do this with people who want to support your children through that way you know I'm, I'm going to set up a trust, and I'm going to have the beneficiaries be my daughter and my son and they will, you know, get this for their lifetime or if they're younger you know they could get it for a term of up to 20 years with the trust diversification of income is an important consideration. So if you're like so many of those who've been at the workforce and part of your bonus structure is based on stock in your company. You know you could be approaching retirement and you realize all of your assets are tied up in one kind of stock and that's a little bit dangerous. So you have some of that stock of your of this company, create a charitable major trust or a charitable gift annuity that gets invested in other types of assets. And so you have a diverse stream of income a little bit more of a safety net for you. So, you know I think the key here is, these can offer great financial security plus philanthropic impact right. So you have the ability to diversify your assets, get an income tax deduction, do all of these sorts of things, but you're also doing an amazing thing by making a gift and creating a legacy, be it for LPI or any of the other charitable organizations that you really care about. And I should caveat this at this time and say that not every organization offers life income gifts, and some only offer charitable gift annuities because those are a little bit easier for smaller nonprofits to handle. OSU has a lot of experience with these but you know if you want to support your local church or other organizations like that as well. Please talk to them about what they offer and you may also want to partner with your local community foundation they may offer these types of gifts for you as well. And finally, there's some preferred tax treatment for assets transferred and payments so we talked about this a little bit. So, you know when you generally when you get a paycheck, it's all ordinary income tax at that high rate. So if you create a charitable gift annuity or a charitable remainder trust, the income payment that you receive is could be partial return of principal so that's tax free. It could be partial capital gains. So that's taxed at a lower rate, plus ordinary income so being, it's entirely possible and frequently happens that the entire income payment is not taxed at the ordinary income rate. There are portions of it that are taxed at a lower rate so just so in general you have a lower, lower taxes for that income payment to you. So I want to go into an example of how this works. So this is John and Barbara. John and Barbara they retired and they're revising their plans. They have decided that they would like some additional retirement income for yearly travel plans so you know they're doing really good. They've saved their money up really well but they're just thinking you know down the road I think it'd be good to have a sort of a separate piece that's kind of flagged for our, since they're going to be our travel fund. So the kids are financially secure and they're going to get the bulk of the estate and they want to support LPI campaign efforts and they would really like to establish an endowed research fund at LPI. Next, they come to a gift planner they come to say Andrew Norwood with the LPI and are myself and Audrey and they say well we're thinking about this what can we do. The first question we're going to ask is what are your assets. So, start thinking about that so they have their primary home, they've got some cash in an emergency fund. They've got retirement accounts IRA they got a Roth IRA they've got such as security income and a brokerage account. Oh, and they mentioned we bought do stock in April 2019 during an IPO for $36 share and Audrey actually looks this number up and this is actually what it went for for your pandemic. So what do you do. Well, you suggest a charitable remainder unit trust. John and Barbara can donate $200,000 of zoom stock to create a charitable remainder unit trust that $200,000 of zoom stock had a $20,000 cost basis so that's a huge amount of growth right $180,000 worth of growth. If they had sold that stock and given the asset to or just to stock outright sorry not the stock they proceeds to the Linus Polling Institute they would have had to pay taxes on the $180,000 worth of growth so that's that's a bad idea. By giving the stock directly into a 5% charitable remainder unit trust, they're going to get a charitable income tax deduction, it's going to be a partial income tax deduction, but it's still a very nice benefit to them. In addition, they're going to avoid and defer capital gains tax so they're not going to pay any capital gains tax when it gets transferred into the charitable remainder unit trust. The deferral part comes that some of their income payments will be taxed at a capital gains rate which is lower than the ordinary income rates and that's a great thing. They decided to choose a charitable remainder unit trust, because they wanted that inflationary hedge these variable payments will benefit from market growth. The number 5% of the principal is valued on January 1 that's how charitable remainder unit trust work, and they've decided to receive payments for the rest of their lives. So, if you look on the bottom here where we've got some lovely images of dollar signs, you can actually see what that's going to look like so almost $70,000 of an income tax deduction. So they get to use that on their taxes for this year any, any income tax deduction that cannot be used because of the limits through the tax law that can be carried forward up to five years so that's a nice little benefit they can use this in the years going forward. $190,000 actually $180,000 of gains that may not be taxed, and their first year payment is $10,000 that's a pretty good travel fund for every year. So they're excited they're going to start planning. And most importantly they realize that they can designate the remainder value of the trust for whatever they choose so they work with the Linus Pauling Institute, and they create the Barbara and John Research Fund. That's going to be a great legacy in their name. And while they work with LPI to sort of create the structure of this, you know what the requirements will be of this fund. The, the fund will not begin until the trust ends which in this case happens at their end of their lifetime so once they pass away LPI receives the remaining value of the trust and will use it to create the Barbara and John Research Fund. So here's here a little bit and talk about planning with retirement plans. So during this is, this is a key feature right now I've seen such an explosion of growth of people deciding to use their retirement plans as part of their charitable planning and the reason for that is, you know, retirement plans from went from being kind of a small portion of people's estate because, you know, they, they were essentially relying on a pension, as opposed to being probably the biggest portion of someone's estate. It's either that or their home and certainly how it works now. So, if you're thinking about your retirement plans and I should mention that we're mostly talking about tax deferred retirement plans such as IRAs 403b things of that nature. When you're looking at this, you know, accounts that you started with Schwab or fidelity and gosh it's so big and I, you know, I'd really like to do something with it during my lifetime. Well, there's a couple of rules that we have to think about. So, once you hit age 59 and a half, you can choose to pull funds from, excuse me, these retirement accounts without a 10% penalty before that you're going to have that penalty so it's best to leave these funds alone unless absolutely necessary that you withdraw them. At age 72, this is with regards to IRAs, we start requiring minimum distribution. So the government says, you know, you've let this money grow tax free all this time. Now you have to start pulling it out. And when you pull this funds out, there's a certain amount every year you have to take out, and you're going to have to pay taxes on that. So often that's a problem for people because they don't really need the income, they would rather just continue to grow in their account, and they really don't want to pay taxes on it. So what's the solution to that? Well, there's something called the qualified charitable distribution. It's called the QCD. You may have also heard it referred to as the IRA charitable roll over. It's 70 and a half. So even lower than the age where requirement of distributions must kick in, you can take out that money from your IRA, often that minimum distribution amount, and have it sent directly to a qualified nonprofit. So how does this work? It's sort of like monopoly. You know, we do not pass go. You will not get an income tax deduction for that payment that is sent directly to a charity, but you also don't have to pay taxes on it. So it essentially bypasses your state, your net birth, and it goes directly to a charitable organization. This is a great way to support current needs, as Audrey mentioned. So there's been a couple of legislative updates that I want to touch on that's really important and specifically affected retirement planning. So in the Secure Act that came under 2019, they raised the age for requirement of distributions from 70 and a half to 72. So originally the qualified charitable distribution age and the we call the RMD age were actually the same. That has been changed, but you can still make qualified charitable distributions at 70 and a half. So qualified charitable distributions are still permanent. In 2020, you may have noticed that you didn't have to take a required minimum distribution that was paused by the CARES Act, but that was only for 2020. So this year you must still take your required minimum distribution. So that's how they function during life and how you can possibly use for time it plans to make a current gift through the qualified charitable distribution. Now, what happens when you pass away because as we've talked about these can be the bulk of your state. So retirement plans are not actually transferred through the probate process. They're transferred for through a beneficiary designation form. This is an incredibly simple form. Often you fill it out online with fidelity or Schwab. Some states will require a spousal approval if you choose to designate a non spouse primary beneficiary. But that's an easy thing to do this spousal signs the form it gets sent off. So these forms are great because you can change your beneficiaries very quickly without needing to involve an attorney. It's an easy process. So why would you consider giving a making a charitable gift for a beneficiary designation of your retirement account. Well, that's because they're not exactly tax friendly. When you pass away. So tax deferred plans which are known as qualified plans are subject to state and federal income taxes and possibly a state tax when the assets of withdrawn. So if you leave your retirement account, say your IRA from Schwab to your children, when two things are going to happen and we call it double taxation. So your state is going to have to pay taxes on this on this asset. Especially if you live in a state that has state of tax state estate tax like Oregon does. And they could your state will also have to pay income tax on these plans because they continue to earn income even after you pass away it's called income in respect to the decedent IRD. In addition, those airs your kids and this example when they pull out. They come from this IRA, they're going to have to pay income taxes on it as well. And that can even bump them into a higher charitable or higher income tax bracket which is a terrible thing to happen. So all of a sudden this account that you know you thought you were giving this fantastic asset to your kids. It can be eroded by upwards of 40% and sometimes even higher. And if you decide to leave these retirement accounts to a charitable organization, these requests are tax free, and you know if your IRA is valued at $100,000. The organization, be it us, be it the Nature Conservancy, whoever you choose, they will get the full $100,000 worth of value. They don't pay taxes, so the whole value of the IRA is preserved for the use of the charitable organization. So, this is particularly important when the Secure Act came in in 2019. This created something called the 10 year spend down role. We also called it the elimination of the stretch IRA. So before this, many people had used these IRA accounts, these tax deferred accounts as a sort of trust account for their children. The idea being that they would leave these accounts to their kids, and the kids would then be able to pull distributions out of these IRAs over their lifetime, and essentially it could function as a trust account. The Secure Act totally got rid of that. Now this has to be these accounts have to be spent down within 10 years and that's a pretty significant tax fight, and you're really really eroding the value of the account. So, what we suggest is you make charitable requests from these assets first, and then you could use these assets to consider creating a charitable trust, which would spread payments out for an loved one over their lifetime so you could actually direct an IRA or that nature into a charitable remainder trust for the benefit of your children so we we sound a great little work around. If you have any further questions on that please contact me I'm happy to walk you through that in a little bit more detail. So I talked about this a bit but I want to go into an example, because it's, it's something that we're seeing a lot of and it's really making people have to reevaluate their state plans, especially since this just came out in a very close to start of the pandemic. So, in this example, Benny and Beatrice Beaver they want to support OSU and their family through their state. They initially leave of the quest to OSU in the Rev. Living Trust. For example, they decide to leave 8% of their Rev. Living Trust to OSU, and they decide to name their children as the beneficiary of their retirement accounts. However, there's a problem. The IRS is going to impose income taxes on the remaining balance of the account. If you designate it to a beneficiary other than your spouse, there are a few exceptions for their, they're pretty rare. So for the vast majority of people, there's going to be some income taxes involved here, they can a row the account balance of up to 40%. So this tax is in addition to the estate tax so it could be imposed for states fully subject to the estate tax and this is we're talking about the federal level of state tax which is extremely high right now. The result can be that up to 60% of the value of retirement plan will be consumed in taxes before your child relative or friend receives it. So that asset that you thought were you were giving them this absolutely fantastic account that will get them through the entire life. All of a sudden it's lost 40 to 60% in value. And that's that's an unfortunate consequence that a lot of people don't consider. So here's what this looks like. So $500,000 IRA accounts to their daughter Belinda the amount she could receive after taxes is only $300,000 and we got that by 40% of 500,000 is 200,000 so that's the amount they're going to pay in taxes. 500,000 minus 200,000 is $300,000 so Belinda, all of a sudden has a lot less money than she was expecting. So given the large impact of these income taxes, then he switches it up. They leave their daughter $500,000 and appreciated stock. Once they pass away, she received a step up in basis. This is a great little trick of the tax code, which means that her basis went from. It's going to be actually that $500,000 is not the price that they originally paid for when they bought the stock they're just going to get that she's going to get that $500,000 and basis which is great for her. Instead, they designate OSU as the beneficiary of their IRA account. So 100% of their IRA balance passes to OSU tax free. So essentially, this is a win-win for them. They're still giving the exact same amount of funds to their daughter, and they're making a really great gift to OSU. So if I can leave you with any advice, particularly with regards to retirement accounts, it's that planning ahead is the best defense. I don't want you to run off the cliff like a Coyote and Roadrunner. The best thing you can do is sit down with a trusted advisor, sit down with our office, think about these things in details, educate yourself, and make sure that the plan you have structured is going to really work for you and your family. And how you can work with us? Why would you let us know that we're in your plans or why would you consider involving us in an early stage? First of all, we want to thank you for your wonderful gift, even the fact that you're considering it. We want to ensure that there's clarity and understanding of your plans. The worst thing that could happen, and this does happen with summary regularity, is that someone passes away. They write up this lovely gift that's coming to OSU, and we have no idea what to do with it, because there's been no conversations, there's no information in the actual will or trust. So if you wanted to support the Linus Polling Institute, and that's not explicitly written down, we have no idea that that's, that was your goal, and that's, that's such a shame. We want to ensure that your gift stands to test of time. So something that can be used for many, many years going forward. We want to work with us to create a gift plan that meets your goals, both charitable and personal. So, you know, taking care of your children, ensuring that your assets are divided as you wish. Consider us part of a team that can go with you. Part of the team just as part of your financial advisor and your attorney. And we also want to understand your, the appropriate recognition and confidentiality that you choose. Be completely anonymous. Are you okay with us sharing your story, even just sharing your name. Those are important things to consider. So what we offer is free non-obligation consulting. We're happy to chat with you and your attorneys. We partner frequently with advisors and our campus colleagues. We have both current and deferred gift options. We also have the ability to accept real estate and other complex assets. We have all the life income gifts, as well as probate administration. And we do things like this in our part of our job is education. We want you to make the best choice for you. So materials and presentations, we have lots of those things. I want to mention that our website is a wonderful, wonderful resource. And that's going to be put up here in just a second. So we do things like a wheel planner, gift calculators, all of this assets are available on our website and we have lots of brochures that we are happy to send you as you start to think through this process. So thank you very much. Do you have, does anyone have any questions? Stephanie, we did have one question. Someone in the audience is hoping that we would discuss donor advice funds. Sure. So, donor advice funds, I can touch briefly on this. That's not something the OSU Foundation offers, but they're very popular right now, particularly through community foundations. That's where you most often see them. Donor advice funds function and that you give an asset, you know, a check stock, things of that nature to a charitable organization that creates a fund for you that you essentially get to use as a charitable spending account. You get to choose often the beneficiaries of these, these distributions, shall we say, from the donor advice fund. And there's a trick of the law and that technically you can only advise the holding organization as to which other charitable entities you would like to support. So people often set these up for smaller organizations. So, you know, perhaps they really want to support their church and the local blue scout council and the local state park. So a great way to do this could be through a community foundation. You set up the account through one organization, say the Oregon Community Foundation, just given that it's the biggest one in the state. And then you can direct the payments from this fund to the organizations that you care about. Now you only get one income tax deduction, you get it for the original gift of the asset to create the donor advice fund. But they're a great option and people use them frequently to do things like support small capital projects. And I'll just jump in one, there are some limitations to donor advice funds. I'm thinking of in particular, they cannot receive some types of gifts so the IRA qualified charitable distribution, for example, those cannot be made to sponsoring organizations, which a community foundation would be one or fidelity. Those gifts are reserved for public charities such as the OSU foundation. Yes, absolutely. And one other thing to mention with donor advice funds is that oftentimes those funds will still have a balance at the end of the original donors death and so you can name another organization as a beneficiary of those funds now with community foundations, they might have a requirement that the remainder go to them or a portion of the remainder go to support the community foundation. But for other like fidelity charitable, you shouldn't make a plan to distribute those residual funds in some way. Absolutely. And it's also worth mentioning that donor advisor funds could have double fees. So, you know, there could be a few when you actually set up the donor advice fund with the sponsoring organization. And there could be an additional fee when you choose to make every distribution from the fund. So if you're considering creating a, what we call a DAF a donor advice fund with an organization, make sure you read the fine print, so that you're getting the most bang for your buck. I'm going to stop sharing right here. Thank you, Stephanie and Audrey for tons of information that are just great great resources that we have in you has our experts at the OSU foundation. I'm not seeing any other questions. But again, in the chat, there are the contact information for both Audrey and Stephanie. If you have additional questions, the presentation recordings will also be sent to all of you as well if you want to revisit or review any of this information at a later time but let me thank Stephanie and Audrey for joining us today and thank all of you for for being here. We look forward to talking with you more in the future.