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Don Rowe: A Convert to Gift Annuities

Don and Louise Rowe smilingBefore coming to Otterbein St. Marys with his beloved wife, Louise, Don was a sales trainer and insurance agent and manager with Nationwide Insurance Company. With his CLU (Certified Licensed Underwriter) credentials, Don led sessions throughout the United States speaking with insurance agents on a variety of topics. Whole life, universal, fixed and prime were common words in Don's vocabulary before his idyllic days at Otterbein, where he enjoys sunsets on the lake, watching the migration of birds and serving others through his skills as a woodworker and manager.

Don is fluent in a variety of topics and loves to talk about his work, with the exception of one topic: annuities. "The word ‘annuity' was a bad word to me as an insurance agent and trainer. For annuities sold by insurance companies," he explains, "benefit the company and not the client."

Don says that with commercial annuities, the residuum goes to the company, not to the annuitant. For that reason, Don followed a career practice not to promote annuities to clients or colleagues who were trained to advocate them. That attitude about commercial annuities continued when Don and Louise moved to Otterbein.

As the years rolled along, Don grew in his love for Otterbein and began to see it as a place of caring and trust—not that he ever doubted that! Don's parents lived at Otterbein in the late 1980s and 90s. Don's father and mother, a farmer and teacher respectively, loved and were loved at Otterbein. They were very generous and took a special interest in giving many charitable gifts, particularly for benevolent care. Don recalls visiting them in their home by Grand Lake St. Marys and eventually considering Otterbein as the place where he and Louise would retire to enjoy life more fully.

After Louise experienced an extended illness and ultimately passed away, Don began to see, as the compassionate community of Otterbein comforted him, that a charitable gift annuity was a way to express his thanks to his fellow residents while receiving lifetime payments for himself as well. Don saw that, unlike commercial annuities, a charitable gift annuity could benefit and assist his charity of choice—in this instance, Otterbein—and help it achieve its charitable mission. In addition to his payments, he also received a significant charitable deduction and the possibility of other tangible benefits as well.

With the annuity rate based on the participant's age, Don sees gift annuities as ideal for an older population. Equally beneficial, payments are partially tax-free over a period of time, and there are significant benefits in regard to capital gains, which are reported over time instead of having to be paid all at once. Don believes that both the charity and the donor benefit with advantages for both.

"Besides," beams Don, "giving makes you feel good!"

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A charitable bequest is one or two sentences in your will or living trust that leave to Otterbein Senior Lifestyle Choices a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Otterbein Senior Lifestyle Choices, a nonprofit corporation currently located at Lebanon, OH, or its successor thereto, ______________ [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Otterbein or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Otterbein as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Otterbein as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Otterbein where you agree to make a gift to Otterbein and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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