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Estate Planning with NAHA

Over the years, bequests of all sizes played an important role in the growth and success of the Norwegian-American Historical Association. As a main source of endowment support, bequests help ensure that NAHA will be financially sound for generations to come. They are especially important for NAHA's most essential needs: operations, archives, and publications.

Types of Bequests

You can make a bequest to NAHA by preparing a new will or adding a codicil to your present will. To make certain your exact intentions are followed, wills and codicils should be prepared by or with the advice of an attorney.

  • Cash bequest: NAHA receives a specified dollar amount
  • Specific bequest: NAHA receives specified assets, such as securities
  • Residuary bequest: NAHA receives all or a percentage of the remainder of your estate after other obligations have been met
  • Contingent bequest: Property is distributed to NAHA only if the named beneficiary is deceased

Advantages of a Bequest

Your will ensures that your assets are distributed according to your wishes to the people and institutions most important to you. Through a bequest, you can have the satisfaction of knowing that you will help NAHA for years to come, at the same time providing for your loved ones.

A charitable bequest is deductible for federal estate-tax purposes with no limit on the amount of the deduction. In addition, bequests are generally not subject to state inheritance or estate taxes. In a large estate, the savings can be more than the value of the bequest.

Illustration No bequest $200,000 bequest
Total estate value $1,250,000 1,250,000
Administration expenses & debts <50,000> <50,000>
Adjusted estate value $1,200,000 $1,200,000
Charitable deduction n/a

<200,000>

Taxable estate $1,200,000 $1,000,000
Tentative estate tax 427,800 345,800
Credit* <345,800> <345,800>
Estate tax 82,000 -0-
Estate-tax savings n/a $82,000
     

Example: Mrs. Olson, a widow, dies in 2003 leaving a gross estate valued at $1,250,000. A comparison of her estate-tax picture with and without a charitable bequest of $200,000 illustrates how the charitable estate-tax deduction can reduce the cost of the bequest. By making a charitable bequest of $200,000, Mrs. Olson reduces her federal estate-tax burden by $82,000. Thus, Mrs. Olson is able to make a bequest of $200,000 at an actual cost of $118,000.

* For 2003 each estate is entitled to a credit equal to the tax on the first $1,000,000 of taxable transfers ($345,800) or the tentative tax, whichever is less.

Examples of Bequest Language

Unrestricted bequest

We suggest the following language for use in making an unrestricted bequest:

I give and bequeath to the Norwegian-American Historical Association, a not-for-profit corporation located in Northfield, Minnesota, the sum of _____ dollars ($___) or (____ shares of ____) or (____% of the remainder of my estate) to be used for its general purposes.

Bequest for a specific purpose

We recommend that you contact our office for assistance with a bequest for a specific purpose. For a restricted bequest, we suggest the following language:

I give and bequeath to the Norwegian-American Historical Association, a not-for-profit corporation located in Northfield, Minnesota, the sum of _____ dollars ($___) or (____ shares of ____) or (____% of the remainder of my estate) to be used for the following purpose: (Examples: support for operations, for archives, and the publication program).

If you designate a particular purpose for your bequest, inclusion of the following language will ensure that your gift will always remain productive and will help NAHA respond to changing needs and conditions:

If, in the future, it is the opinion of the Board of Directors of NAHA that all or part of the income of this fund cannot be usefully applied to such purpose, it may be used for any related purpose that in the opinion of the Board of Directors will most nearly accomplish my wishes.

Retirement-Fund Assets, Tax Savings, and NAHA

Today, IRAs, Keoghs, 401(k) plans, and profit-sharing plans make up a large part of many estates. While the primary purpose of retirement-fund assets is to provide a source of income during retirement, in many cases substantial balances remain after the deaths of both the retiree and the retiree's spouse. When left to family members or friends, these gifts can be subject to considerable taxes including estate tax and federal and state income taxes. If a nonprofit organization such as the Norwegian-American Historical Association is named as the beneficiary or contingent beneficiary of all or a specified percentage o your plan, both income and estate taxes are avoided.

Charitable Gift Annuities: Benefit from Your Generosity

$1,000,000 Gift Annuity
Age(s) Rate (%) Annuity Payment Tax-Free Tax Deduction
60 6.0 $600 $325 $2,175
70 6.7 $670 $415 $3,397
80 8.3

$830

$585 $4,497
60-60 5.6 $560 $296 $1,249
70-70 6.1 $610 $369 $2,432
80-80 7.1 $710 $491 $3,763

Charitable giving doesn't have to be a one-way proposition. It is possible to make a charitable gift and actually have an income stream flow back to you--all while generating valuable income-tax benefits.

One way is the charitable gift annuity whose rates are generally higher than fixed-rate returns such as certificates of deposit. This process allows you to make a charitable gift and retain cash flow based on the value of donated assets.

Norwegian-American Historical Association's Planned Giving Society

The Norwegian-American Legacy Circle recognizes individuals who have remembered NAHA in their wills and estate plans. If you have included the Norwegian-American Historical Association in your estate plans, we would appreciate knowing of your intentions. Knowledge of bequest intentions offers us the opportunity to thank individuals for their foresight and generosity and helps the administration plan for the future. All requests for confidentially are carefully honored.

For More Information

If you have included the Norwegian-American Historical Association in your will, are considering doing so, or have any questions about planned gifts, please call our office. Your inquiry will be confidential and places you under no obligation.

We look forward to hearing from you and appreciate your interest in NAHA. Please complete this form to request information, or call us.

 

 
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