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Couple Uses Retirement Plan Assets to Reach for the Stars


Paul Errington's vision for Ball State stretches into the stars. His wife Sue, an Indiana state senator, shares his vision. Together, they plan to ensure their dreams for the university are realized thanks to a generous gift from their estate.

After 34 years as a professor with a focus on electricity and magnetism, Paul, who retired in 2004, is still connected with the university and the scientific world around it.

With technology constantly evolving, new ways to study science are developing as well.

"He was a chair for a few years," says his wife, Sue. "He is aware of what the department's needs are."

"We want to help with the greatest needs," Paul emphasizes. One of those needs includes renovations to the planetarium. The Ball State astronomy program has one of the largest enrollments in the United States and the planetarium has hosted more than 380,000 visitors since it opened its doors in 1967.

The Ball State Bold Capital Campaign is focusing on a planetarium overhaul with a new digital star projector, 10-foot diameter increase in dome size, and additional seating. The updates and renovations are something Paul is very enthusiastic about.

The Erringtons have chosen to give back to Ball State with a gift using their retirement plan. They have named the Ball State University Foundation as a beneficiary of these assets.

"This seemed natural," Sue says. "All the time Paul spent here, it has so much meaning to him. Ball State gave us our living, and now we're giving back."

Sue has her own personal connections to Ball State. She temporarily worked part time as a beginning Spanish teacher. She became very involved in the women's movement and Planned Parenthood. Her experiences as an advocate eventually led her into the political realm and election to the Indiana Senate. Sue is currently a senator representing Delaware County and Van Buren Township in Madison County.

While looking at their future and back at what Ball State has done for them, the Erringtons decided to provide for both.

"We went to our financial planner and made sure that our daughters and granddaughter are taken care of," says Sue. "We also wanted to make sure we chose the right gift to give to Ball State. Ball State has always been a part of our family. We learned that the retirement plan can be the most heavily taxed asset in an estate, so it made sense to plan our gift using the retirement plan-saving taxes and helping Ball State at the same time!"

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A charitable bequest is one or two sentences in your will or living trust that leave to Ball State University Foundation 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 Ball State University Foundation, a nonprofit corporation currently located at 2800 W. Bethel Avenue, Muncie, IN 47304, 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 the foundation 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.

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 the foundation 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 the foundation 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 the foundation where you agree to make a gift to the foundation 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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