Leaving a Lasting Rotary Legacy, Estate Planning and the Rotary Foundation!
If you are a member of an Active member of a Rotary chapter, chances are you are a very active member of your community. You have not only seen how being a part of a group of like-minded, service oriented, Rotarians can be a wonderful blessing to yourself, but also helps to build a stronger local and global community that everyone is welcome in. From nearly eradicating polio, to supporting schools in Africa and South America, to providing dictionaries to local elementary school, Rotarian’s put there 3 T’s (time, treasure, and most importantly talent) into making sure that our organization does more then just lip service to our motto “Service Above Self.” Today though, we are going to talk about that second T, treasure, and how you can use yours to make sure the Rotary motto is making the world a better place long into the future. Over your lifetime, if your anything like most Rotarians, despite the quarterly dues and constant fundraisers, you have managed to save up a decent trove of treasure (or as most Estate Planning Lawyers like to call it, wealth.) This article will discuss some of the ways in which you can create an estate plan to use that treasure, both during your lifetime, and after you have passed away, to support Rotarians and their efforts in your local and global community for generations to come.
One method of accomplishing this goal is through something called a planned legacy gift in your estate plan. Gifts from generations of Rotarians (and non-Rotarians) provide ongoing support to Rotary programs and are creating a world of good long after their lifetimes. This tool allows Rotarians to not only take advantage of financial and tax benefits, but to earn recognition by the Rotary at various levels and create a lasting legacy.
Common Ways to Leave a Rotary Legacy in your Estate Plan
The most common way to leave a gift is to create an estate plan which includes provisions or benefits to the Rotary Foundation, or your Local Rotary chapter. Here are a few of the ways that can be done:
- A provision in a Last Will and Testament (including codicils).
- A provision in a revocable or irrevocable trust.
- Life Insurance beneficiary designations.
- Real estate and other asset transfers.
- POD Designations to Rotary of retirement plan assets or other financial accounts.
- Charitable Gift Annuities (immediate and deferred).
- Charitable Remainder Trusts or Charitable Lead Trusts.
- Creating a Pooled Income Fund.
- Creating a Donor Advised Fund.
Estate Planning Legacy Gift Concerns
Many Rotarians worry about leaving a legacy gift to the Rotary. This can happen for any number of reasons, including. But by looking for an estate planning lawyer who has a firm understanding of the various tools and methods available, your personal and family goals with your estate, and your desire to leave a lasting Rotary legacy, you can put many of those concerns at ease. Here are a few of the more common issues that arise when Rotarians are sitting down with their estate planning professional:
Paying for young children’s welfare, health and education as they grow up.
- When setting up your estate plan, if you have minor or young adult children, leaving anything to Rotary (or any charitable organization) can seem like a big risk, after all how do you know what assets and resources your child will need as they continue their journey to adulthood without you to adulthood. One technique to get around this fear is by leaving a remainder amount to the Rotary Foundation, after the child has reached the age at which you believe your child should be self-sufficient. For example, if setting up a trust which pays for the health, education, and general welfare of your child until age 25, but disperses the trust assets thereafter, you could elect to do a percentage of the final distribution amount. In this way you can ensure that money is first used to cover the costs of your support obligations while leaving a benefit if those assets prove to be more then enough.
Concern about care of others (spouse, parents, special needs children children).
- This is another place where leaving a remainder interest after the fundamental needs of your family and other loved ones who rely on you are met. One option to accomplish this goal is to establish a Special Needs Trust (SNT). A properly created SNT will be able to provide for all the benefits of the person your concerned about, while still allowing them to be eligible for various government programs benefits, and giving you the option of who should receive the funds after that person passed away. This is a great way to take care of people while leaving a Rotary gift.
Selling a business.
- The day you sell your business can be the scariest in your life. You are probably turning a steady revenue stream into a large one-time payment. This can be a great time to use a charitable trust structure to give yourself a lifetime income, a large immediate tax deduction and a lasting legacy to the Rotary.
Tax issues (income, capital gain, gift and estate).
- Many people think that leaving a legacy gift could have some severe tax consequences. While every person is different, and you should talk to your Tax Professional about your situation, more often then not, a gift to the Rotary Foundation, or your local chapters charitable foundation, can reduce your over tax liability.
Unknown future health care expenses.
- Making a large donation today when you are uncertain of future healthcare costs is not a prudent move, but, by leaving a bequest in your will or trust you can make sure your gift does not diminish your current resources. Estate planning gives you control over what happens, and while it can prevent a tragic event, it can make the issue more manageable.
Concern about outliving resources.
- People are living longer and longer live, and many fear “running out of money” in retirement and being forced to trade in volunteering at Rotary events for shifts at the local mini-mart. A legacy gift to the Rotary Foundation means that you won’t have to worry about leaving the money you need to live on in the future to charity. Of course, meeting with a professional investment adviser is always a good idea when asset exhaustion is a concern.
Need to address multiple charities and limited assets
- No gift is to large or to small for the Rotary Foundation. At a vaccination cost of under a dollar a piece, even your small legacy gift can leave a major impact. However, one thing you should make sure to do if your leaving gifts in your estate to a multitude of charities is to make a contingency plan if any of the charities aren’t around after your passing. Unfortunately, charities, like all businesses often eventually fail to be able to continue to remain open. This can create a huge headache for the person you leave distributing your estate, by incorporating a clause giving any charitable assets with failed distributions to the Rotary, you can make your representatives life easier and make sure you know your wealth is going to a good cause.
Saddled with costs of owning underutilized real estate.
- Maintaining real-estate can be a major expense both while your alive and after your passing. Unfortunately, real estate is often one of the hardest and most expensive assets to liquidate in an estate, but by leaving real property to the Rotary alleviates this headache and provides the Rotary Foundation with new resources.
Concern about earnings available from current assets like dividends, interest, and royalties.
- If you want to make sure your current income producing assets continue to provide for you as you age, a charitable remainder trust (CRT) may be a good option. This type of trust has not only had tax savings benefits but allows you and other designated persons to use the income off those assets, while ensuring they go to a good place after you no longer need them.
Wanting to provide for their children and other heirs.
- If you’re a Rotarian, you know the most important thing you can do for your children is teach them Values to live by. While providing monetary support is a wonderful gift to any child, showing your children the importance of the mission of “Service Above Self”, by leaving a legacy gift, can provide more then money for your heirs. It can teach your loved ones the values you lived by and want to be remembered for.
Can I become a Paul Harris Society Member? What about my family and other loved ones?
Most Rotarians want to ensure that they have made it into the elite club, the one that not just everyone can be a member of. Paul Harris once said, “Perhaps dreaming is not so bad if one dreams good dreams and makes them come true.” Rotarians make dreams a reality through extraordinary projects and activities both in your local community and around the world. The Rotary Foundation recognizes those individuals who contribute US$1,000 or more annually to the Annual Fund, PolioPlus, or approved Foundation grants by inducting them into the Paul Harris Society, but is this really the only way to be a Paul Harris Society member?
The Rotary Foundation has numerous recognitions available to those who elect to leave a gift in their estate plan. The Benefactor designation recognizes someone who informs The Rotary Foundation in writing that they have made a provision in their estate plan for The Rotary Foundation. (alternatively you can make an immediate donation of $1,000 or more to the Permanent Fund.) Benefactor recognition consists of a certificate and insignia to be worn with a Rotary pin.
The Rotary recognizes couples or individuals who have made commitments totaling US$10,000 and over to the Foundation as members of the Paul Harris Bequest Society. As a bonus, Donors may elect to receive an engraved crystal recognition piece and a Diamond Circle pin commemorating the commitment at each new recognition level. There are 6 levels to the bequest society you can attain ($10,000 to $24,999.99 – Level One, $25,000 to $49,999.99 – Level Two, $50,000 to $99,999.99 – Level Three, $100,000 to, $499,999.99 – Level Four, $500,000 to $999,999.99 – Level Five, $1,000,000 or greater – Level Six.
If your one of those blessed enough to leave a gift over $250,000.00 you will even be inducted into the Arch C. Klumph Society, names for the founder of Rotary. The Arch C. Klumph Society recognizes Donors with portraits displayed in the Arch C. Klumph Gallery at Rotary International’s World Headquarters in Evanston, Illinois. Donors also receive a certificate signed by the President of Rotary International and the Chairman of The Rotary Foundation and are invited to a special event at annual conventions.
If you want to ensure your family members achieve the Paul Harris Fellow recognition, your estate plan can accomplish this as well. By leaving the foundation a gift of $1,000.00 or more your estate be allowed to honor someone by naming them a Paul Harris Fellow. This could be a great legacy for your chapter, as you could use this method to make all your club members, Paul Harris Fellows. That’s a gift that will boost your chapters pride, ensure a lasting local rotary legacy, and provide resources for Rotarians around the world to put “Service Above Self.”
What should I do now? How do I start updating my Estate Plan?
After reading 2000 words or so on different ways you can use estate planning to your advantage when distributing your lifetimes accumulation of treasure, I am sure you’re ready to rip up your old estate plan (if you had one) and leave everything to Rotary. But before you do, I would recommend first taking some time to think. It is best not to rush into any estate changes to quickly. By carefully considering your entire situation, you will be able to determine how much you both want to contribute to the Rotary and how it is most beneficial to yourself and the foundation.
But don’t think you have to do this alone; Rotary is filled with members who also happen to be excellent estate planning attorneys. Your estate professional will help you to navigate the waters, and ensure you both understand what you want to accomplish and how you will accomplish it. An estate planning attorney who is also a Rotarian will understand the huge importance of the foundation, and often will even take care of notifying Rotary International of bequests which qualify you for recognition (Your estate attorney should always ask for your written permission first). Best of all with a Rotarian you know your going to get “Service Above Self”.
If you would like to set up a free “goal planning session” with the Author of this article, Jacob A Weil, Esq., EA The Weil Law Group would be happy to help. The Weil Law Group was founded and is managed by Jacob A Weil, Esq., EA, LCAM., a Florida Licensed Estate Planning, Business, and Tax Attorney and the current President of the Rotary Club of Oakland Park/Wilton Manors. Reach out anytime at www.WeilFl.com or by phone at 954-603-7603 to experience how The Weil Law Group puts service Above Self.
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