Title

Text Resize
Print
Email
Subsribe to RSS Feed
Sunday July 5, 2020

Personal Planner

Helping Children Tomorrow

Helping Children Tomorrow

Parents and children often have a different perspective on saving and spending. Parents of retirement age today were born during the 1940s or 1950s and have a strong desire to save and invest in order to increase economic security.

Some of their children may have a different perspective. Because these children did not grow up during adverse economic times, they tend to consume more and save less. Understandably, many of these parents hope that their children could have greater economic security during retirement.

Mike and Kristi are recently retired. They have two children, John and Mary. Mike and Kristi bought a lot on an inland waterway when they were in their 40s. But the next year, Mike accepted a position in a state that was quite a distance from the waterfront lot. They've owned the lot for more than 20 years, but never built on the property because of the distance.

Mike and Kristi retired at age 65. They have good retirement income, a home that is paid for and good savings. Recently, Mike received a very good offer from a person who would like to purchase the waterfront lot. After receiving the offer, Mike and Kristi contacted their attorney, Steve, to discuss the best way to maximize benefits for them and their children.

Mike: "We have been very fortunate. Kristi and I have just retired and we have good income. We both get Social Security and also have two pensions. With that retirement income and our house paid for, we're doing fine."

Kristi: "You might remember that we mentioned buying this lot on the intracoastal waterway years ago. But after we moved south for Mike's new job, it was just too far to travel. We never ended up building our vacation home on that property. Now we've had an offer from someone who wants to buy that property at a great price. We told the person that we weren't quite ready to sell yet, but he still seems to be very interested."

Steve: "That sounds like a good offer and a good opportunity. It may be the right time to sell that lot. But you know that there is a lot of appreciation and you will pay a large capital gains tax."

Mike: "Yes, I know. We were doing some research and a friend of ours who is a gift planner for a charity said that we could save a bundle with a special trust. He called it a charitable remainder trust. We did some reading online and it seems like a good idea. But we don't actually need the income ourselves."

Kristi: "Mike and I like the tax savings. But we thought that maybe what we should do is give the income to John and Mary. They just don't save the way we have. I am very concerned about them. If they don't save more, they are going to need added income during their retirement. With all the financial uncertainty in America today, we would like to see if there is a way to help them."

Steve: "Many parents share your desire to provide some added retirement income for their children. You mentioned that charitable trust. Let me show you how a special version of that trust could help John and Mary."

"That trust is usually called a unitrust. I am going to explain how a retirement version of that unitrust could work for them. With your offer of $400,000, we could transfer the lot into the trust and after it is transferred, accept the offer. I suggest the $400,000 in the trust be invested for 20 years. With growth over those 20 years, it could increase to perhaps $1.2 million in value. That's of course depending on how the investments would perform during that time, but it’s quite possible. If we are able to grow to that level, the trust then would pay approximately $2.5 million to John and Mary during their retirement years. In addition, you would receive a tax deduction today of about $42,000 that could save over $14,000 in tax."

Mike: "So if we use that special retirement version of the unitrust, we sell tax free, get a deduction, and the trust grows until John and Mary retire. Then it pays a very good amount to John and Mary. That will very nicely supplement their other retirement income."

Kristi: "This sounds like a great use of that lot. It will answer my question on how to provide added retirement income for the children. Let's move forward with this trust."

Mike: "Plus, even though it's a very long time into the future, there eventually will be a good gift to our favorite charity."

Published July 5, 2019

Print
Email
Subsribe to RSS Feed

Previous Articles

Helping Children Today

Do You Have a Difficult Family?

How to Give Property to Children

Seven Questions on Gifts to Children

Caring for Minor Children

scriptsknown

Maria Poimenidou, 2020
Theodore Diamandopoulos
Memorial Scholarship

"I am currently a senior double majoring in biochemistry and economics and minoring in Innovation & Entrepreneurship. I cannot express enough how much I appreciate the Theodore Diamandopoulos Memorial Scholarship, without it, my Lawrence experience would not be possible. I have enjoyed being a mentor in the CORE freshman mentorship program, playing and working for the Women's Basketball team, competing in Model United Nations, interning as a lab assistant at the MD Anderson Cancer Center in Houston, hosting a pilot STEM program for young unaccompanied refugees in Greece, and volunteering through KidsGive during a field trip to Sierra Leone. Thank you so much for supporting me in doing the things I dream to do."

Jelani Jones, 2021
Marie Dohr Memorial Scholarship

"Being at Lawrence has and continues to be a joy for me. I feel that I have grown so much as a musician, a teacher, and a friend through the awesome community of professors and friends I have met here. I feel that I am blessed to have such an awesome violin professor, and all the faculty members in the education department are so amazing. I have come to see Lawrence and the state of Wisconsin as my home, and I wouldn't change a thing."

Maggie Wright, 2021
Margaret S. and W. Paul Gilbert Memorial Scholarship

The scholarships I receive at Lawrence allow me to experience anything that I want to. I can pursue my love of Biology and Chemistry in classes that are engaging, with professors who care individually about their students. These scholarships also give me the freedom to participate in numerous extracurriculars that Lawrence offers as well, like the Fencing Team and the American Medical Students Association. All of the opportunities Lawrence offers me remind me how grateful I am to have received the Margaret S. and W. Paul Gilbert Memorial Scholarship."

Molly Chadwick Reese, 2020
Anne Prioleau Jones Tuition Scholarship in French

"Attending Lawrence is a privilege few are granted. Every moment spent at Lawrence solidifies a lifelong membership in a special group of peers, known as Lawrentians. The esprit de corps that Lawrence fosters makes the connection between students and mentors new and challenging, with both parties in a constant state of curiosity, respect, and encouragement. My experience as a language learner at Lawrence has not only helped my comprehension of the French language, but has enhanced my ability to communicate and connect with people in ways I never expected before attending Lawrence. As a French major and a student following a pre-medicine track, I have been afforded the privilege of diving into the sumptuous depths of the humanities, while satiating my hunger for scientific knowledge in concert. From this, I am able to fully appreciate the wonders of a liberal arts education. If not for the Anne Prioleau Jones Scholarship in French, I would be unable to join my peers in this quest for knowledge. I am very grateful for the donors' generosity."

Milwaukee-Downer Scholarships and Professorships

Some of the many recipients of Milwaukee-Downer scholarships gather for a photo with Carolyn King Stephens M-D'62 and Marlene Crupi-Widen M-D'55 in January 2014 at the annual scholarship luncheon.

Rosamund Victoria Bille Adler Scholarship
Dr. Charles E. Albright Scholarship
Helen Daniels Bader Scholarship
James G. and Ethel M. Barber Scholarship
Catharine Beecher Endowed Fund for Downer Women
Bessie A. Bell Scholarship
Berk Scholarship
Frederick C. Best Scholarship
Beta Study Club Scholarship
Lynde Bradley Scholarship
Lucia R. Briggs-Alumnae Scholarship
Edith Lange Brooks Scholarship
Anne Barman Caldwell Scholarship
Alice Miller Chester Scholarship
City of Milwaukee Student Funds Scholarship
Milwaukee-Downer Class of 1940 Fund
Milwaukee-Downer Class of 1942 Fund
College Endowment Association Scholarship
Janet Cope Crawford Scholarship
Jessie Mabbott Daniels Scholarship
F. T. Day Scholarship
Rufus Dodge Scholarship
Julia P. Ely and Hannah R. Vedder Memorial Scholarship
General Endowed Scholarship - M-D College
Dr. Alfred W. and Mrs. Ada F. Gray Scholarship
Berenice E. Hess Scholarship Endowment
Lucille Ray Hibbard Scholarship
Belle Austin Jacobs Scholarship
Helen McDermott Jurack and Ronald J. Mason Scholarship
Marjorie S. Logan Scholarship
Nellie Maxwell Scholarship
S. Annabelle & Paul McGuire Scholarship
Memorial Scholarship Fund - Milwaukee-Downer
Milwaukee-Downer Class of 1953 Scholarship
Milwaukee-Downer Class of 1955 Scholarship
Milwaukee-Downer Class of 1956 Scholarship
Milwaukee-Downer Class of 1957 Scholarship
Milwaukee-Downer Class of 1958 and 1959 50th Reunion Scholarship
Milwaukee-Downer Club Scholarship
Milwaukee-Downer/Lawrence College Consolidation 50th Anniversary Scholarship
Francis Evelyn Kelley Morgan Memorial Scholarship
O'Neill-Anderson Family Scholarship Endowment
Elizabeth A. Olson Scholarship
Gilbert Haven Peirce, Sr. and Emma Elizabeth Manor Peirce Milwaukee-Downer Scholarship
Aleida J. Pieters Scholarship
Matilda Siefert Puelicher Scholarship
Elizabeth Ann Richardson Scholarship
William M. Ross Memorial Scholarship
Elizabeth Rossberg Scholarship
Charles Frederic Sammond Scholarship
Mildred L. Schroeder Scholarship
Sivyer Educational Fund for Women
Marion Merrill Smith Scholarship
Dr. Elizabeth A. Steffen Scholarship
W. Mead and Elizabeth McKone Stillman Scholarship
Strzelczyk Family Scholarship
Clare Scherf Sweetman Scholarship
Raymond H. and Jane K. Taylor Scholarship
Jerline E. Walfoort Memorial Scholarship
Barbara E. Wehr Fund
Harmony Weissbach Scholarship
Martha and Frances Wheelock Scholarship
James G. and Ethel M. Barber Professorship of Theatre and Drama
T. A. Chapman Professorship in Music
Alice G. Chapman Professorship in Physics
Alice G. Chapman Librarianship
Milwaukee-Downer College and College Endowment Association Professorship

Angela Small Fry Intia, 2019
Maurine Campbell Scholarship

"Thanks to the Maurine Campbell scholarship, I have been able to attend the amazing school that is Lawrence University. With the help from this scholarship, I have been able to pursue my dream career in chemistry working with the outstanding and extremely helpful faculty here. Even outside of chemistry I take the time for exploration into my interests and want to give back through my work as a resident life advisor, stock room assistant, and student supervisor at Bon Appetit. Everything I have learned here, academically or not has forever molded the person I am today."

LarryU Facebook Twitter Instagram YouTube

© Copyright 2020 Crescendo Interactive, Inc. All Rights Reserved
PRIVACY STATEMENT
This site is informational and educational in nature. It is not offering professional tax, legal, or accounting advice.
For specific advice about the effect of any planning concept on your tax or financial situation or with your estate, please consult a qualified professional advisor.