Gift Planning Newsletter

Leaving Something BehindAn Alumnus’ Estate Gift Provides for the Future

“He came here as a refugee when he

was eleven years old and didn’t speak

English,” says his wife, Catherine

O’Donnell Pazemenas. “But he worked

very hard.” And Penn State offered Vytas

an opportunity to forge an exciting

future. “He really appreciated the

education he got there,” Cathy recalls.

“He thought it was an all-around great

engineering background.”

Inspired by the quality of the

instruction, facilities, and research efforts

he saw during his visits, Vytas hoped to

deepen his relationship with Penn State.

“Education was very important to his

family and to him,” Cathy says. “And he

thought that any other students would be

very, very fortunate to get the same kind

of education that he did.”

Sadly, Vytas passed away in 2009 after

a sudden, brief illness. But in the months

before his death, he took steps to ensure

that he would have an impact on Penn

State students in the future: He and Cathy

established a bequest to Penn State’s

Department of Electrical Engineering

Remembering Penn State

6

contract engineering and manufacturing

firm specializing in the development of

medical devices. In recognition of his

professional achievements, Vytas was

posthumously honored with the College

of Engineering Outstanding Engineering

Alumni Award in 2010.

“Vytas loved being an engineer,”

Cathy recalls, “and he liked interacting

with other engineers.” That enthusiasm

for his field was part of what pleased him

so much about reconnecting with Penn

State, as he explored the

research and teaching

in his old department.

As Cathy notes, “he

found it very exciting

what the faculty and

students were doing,

the course offerings,

and their plans for the future.” Thanks

to his and Cathy’s gift, Vytas will leave a

lasting mark on the department he loved.

Penn State Office of Gift Planning

through their living trust. Cathy later

worked with the Office of Gift Planning

to structure a gift that will establish

a named department head position,

a faculty chair, or other endowment,

depending on the department’s needs

and the funds available when the bequest

is ultimately realized.

“Regardless of its final form,

the Pazemenas’ gift will give the

department crucial support to keep our

research and teaching moving forward,”

says College of Engineering Dean

David Wormley, who remembers Vytas

fondly as a consummate professional

with a vibrant intellect.

In a career built upon his technical

abilities and entrepreneurial talents—

he’d started his first business, repairing

televisions, at age fifteen—Vytas held

various engineering and leadership

positions with established companies,

and ultimately founded his own

company in Irvine, California. Aubrey

Group, named after the hero in Patrick

O’Brian’s series of nautical novels, is a

Michael J. DegenhartExecutive Director

Brian J. McCullough, Esq.Gift Planning Officer

Larry J. MrozGift Planning Officer

Thomas L. ParrishAssociate Gift Planning Officer

Patricia L. Roenigk, Esq.Director, Individual Gift Planning

Jeanne M. SalladeAssistant Director

Terri L. AssaelGift Planning Assistant

Office of Gift Planning214 The 103 Building University Park, PA 16802

814-865-0872 Toll-free: [email protected]

www.giftplanning.psu.edu

Gift Planning Newsletter

A SIMPLE WAYTo Leave Your Mark on the World


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Gift Planning NewsletterSPRING 2012

When Vytas Pazemenas first came to Penn State as a freshman in 1957, just a few years after his family fled the Soviet occupation of Lithuania, he hoped that a college degree would be a path to a better life in the United States. By the time he returned in 2008 as the featured speaker in the College of Engineering’s Gaelen Entrepreneurship Speaker Series, he had parlayed his degree in electrical engineering into an impressive career capped by the founding of his own successful firm.

Inside This Issue: PAGE 2: An exciting new gift option PAGE 3: A unique gift that helps you to preserve family wealth PAGE 5: A simple change that helps Penn State students PAGE 6: Remember Penn State in your will

Vytas Pazemenas


How Will 2012 and 2013 Tax Law Changes Affect You?Continued from

Continued on Page 6

You can easily modify the beneficiaries

of the following assets at any time to

meet your changing needs:

IRAs and retirement plans

Life insurance policies

Insurance annuities

Changing BeneficiariesTo name or change a beneficiary,

contact the administrator of the IRA

or retirement plan, or your insurance

company, for a change-of-beneficiary

form. Decide what percentage of the

plan’s value you would like us to

receive and name Penn State, along with

the stated percentage, on the beneficiary

form. Return the form to your plan

administrator or insurance company.

Changing beneficiaries is also

tax-smart. If you name loved ones as

beneficiaries of these assets, federal

income taxes can erode up to 35

percent of the assets. As a nonprofit

organization, Penn State bypasses any

taxes and receives the full amount.

Naming Penn State as the beneficiary of certain assets is a simple way to make a lasting impact.

Holding Depreciated Securities?In response to questions from our loyal alumni and friends, here are the details about making a gift using depreciated securities.

If you have stocks that have

experienced significant declines and

are now worth less than what you paid

for them, consider using those stocks

to make a gift to Penn State.

For maximum tax savings, sell the

stock, take any allowable loss, and

then donate the cash proceeds to us.

This way, you’ll obtain a charitable

deduction for the cash gift, and you

can offset the losses against any gains

this year. If your overall losses exceed

your gains, you can deduct up to

$3,000 of the excess loss from

ordinary income—and carry over

excess losses to future years.

To learn more, contact the Office

of Gift Planning at 888-800-9170.

YOU’RE INVITED! The Atherton SocietyWhen you support the future of Penn State through a planned

gift, you join a group of alumni and friends who share a love

and vision for our University and, more important, our students.

This inspirational group is called The Atherton Society, named

for George W. Atherton, Penn State’s seventh president, and

his wife, Frances. Their efforts laid the groundwork for today’s

achievements, much like your gifts do today.

Join UsMembership is offered to individuals who have included Penn

State in their estate plans or as a beneficiary of a planned gift.

Your bequest commitment can help us reach the goals of For

the Future: The Campaign for Penn State Students. Sharing

your intentions with us allows Penn State to ensure your wishes

are fulfilled in the future.

Remember Penn State in Your WillA gift to Penn State in your will or living trust, known as a bequest, is a simple way to extend your support beyond your lifetime. A bequest allows you to make a significant difference without parting with any assets today. You can leave us a specific asset, a specific dollar amount, or a percentage of your estate. And you can change your mind at any time should your circumstances change. Best of all, this simple and straightforward gift can be added to your will in as little as one sentence. Contact us today to learn more.

If you updated your estate plans in 2011, you’re in luck—this year promises to be much of the same.

Estate taxes: In 2012, the basic

threshold amount—the amount you

can own before your estate is subject

to estate taxes—is $5.12 million.

Most married couples who both die

in 2012 can pass a combined estate

worth approximately $10 million

free of federal estate taxes through a

portability provision. In 2013, the

threshold amount drops to $1 million

and portability between spouses ends,

unless Congress makes changes.

Income and capital gains taxes:

Rates remain the same for individual

taxpayers in 2012.

Charitable IRA rollover: As of

April, the charitable IRA rollover has

not been extended by Congress.

DONOR ADVISED FUND

SUPPORT PENN STATE

as securities or real estate, and other

resources to a fund that is invested

and administered on your behalf by

the University’s partners, investment

firm Kaspick & Company and DAF

technology and services provider

Crown Philanthropic Solutions, LLC.

An account can be established

with a gift of $25,000, and it can be

increased with additional contributions

of $1,000 or more. You may choose

to have your gift(s) invested in one of

eight investment options, much like

mutual funds, that reflect different

growth and income strategies.

This fund offers an important

alternative to other approaches to

charitable giving. Gifts to the fund

can be made when they will be most

financially advantageous for you,

and the fund then provides you

Act on this giving opportunity during

these times of extremely low interest

rates. This is the most tax-efficient

time to implement this strategy into

your plans.

Ultimately transfer property to loved

ones at minimal tax cost.

Your professional advisor can help you

decide if a lead trust is an effective way for

you to support Penn State programs and

meet your financial goals.

“The Pennsylvania State University

Charitable Gift Fund was created to

help generous individuals and their

families manage and simplify their

philanthropic activities,” says

Rodney P. Kirsch, senior vice

president for development and alumni

relations. “This launch comes after

years of research and preparation, and

we are proud to be offering our alumni

and friends one of the most innovative

approaches to giving available today.”

Through this fund, you can make

gifts of cash, appreciated assets such

How It WorksThis trust pays Penn State an income

for a certain length of time. When the

term is up, the remaining trust assets

go to your family or other beneficiaries

you select.

Is a Lead Trust Right for You?Good candidates for a charitable lead

trust want to:

Forgo access to an asset, without

depriving heirs of it later on.

Without Giving Up Assets for Your HeirsPreserve Family Wealth with a Charitable Lead Trust

The Pennsylvania State University Charitable Gift Fund is a donor advised fund that allows Penn State donors to invest their charitable dollars and direct contributions to both the University and other nonprofit organizations.

Do you want to benefit from the tax savings that result from supporting Penn State, yet you don’t want to give up any assets that you want your heirs to receive someday? You can have it both ways—with a charitable lead trust. Plus, the current low interest rates make this giving option more attractive than ever!


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with tremendous flexibility in

the timing and targeting of your

charitable support.

Gifts can be counted as tax

deductible as soon as they are

committed to the fund, allowing you

to manage the impact of significant

tax events.

You may allocate your gift to the

program or charity of your choice

at the time that it is given, or you

may wait to direct your giving

until you have further defined your

philanthropic priorities. At least

50 percent of the distributions from

your account must ultimately be gifted

to Penn State, and the remainder

can go to the University or to other

qualified charitable organizations.

ESTATE PLANNING TIPS TO HELP YOU ACHIEVE YOUR CHARITABLE GOALS

The information in this publication is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.

© Penn State University and The Stelter Company


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How You BenefitThe gift or estate tax savings from a lead

trust are based on the current value of the

income paid to Penn State over the trust

term. The greater the trust’s payment

amount or the longer the trust term—or

both—the greater the value of the gift to

Penn State and hence the lower the overall

taxes to you or your estate.

The size of your trust and its term are

up to you.

Example: For each $1 million you leave to

your heirs over the threshold amount—the

threshold in 2012 is $5.12 million, but it

drops to only $1 million in 2013—estate

taxes will consume up to $350,000 and your

heirs will get $650,000 (assuming your estate

is subject to estate taxes at your death).

With a lead trust, you can transfer

$1 million to your heirs after your death,

leaving only $22,700* subject to estate tax,

instead of $1 million.

To accomplish this, you create a $1 million

lead trust from your estate that will pay Penn

State $65,000 annually for 17 years. When

the trust term ends, the remaining trust assets

will go to your named beneficiaries.

Want to Learn More?The lead trust is a good giving option

for many of our alumni and friends—

especially during these tough economic

times. For more information about how

this gift could work for you, contact Mike

Degenhart at 888-800-9170.

* Based on annual payments and a 1.4 percent charitable midterm federal rate; this rate changes monthly.


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Penn State Launches New

Two FREE GuidesReturn the enclosed reply card today to receive two FREE brochures to help with your gift planning. Provide More for Your Heirs and Cut Taxes guides you through the basics of a charitable lead trust, and The 3 Easiest Ways to Leave Your Legacy outlines the simple process of making gifts to Penn State through beneficiary designations. We’d also like to send you My Will Planning Guide, a useful 23-page booklet to help you collect and organize important information. The guide is also available in CD format. Just check the boxes on the reply card and we’ll send yours today!

Paul and Eleanor ChaddertonWhy We Chose a CLT

As longtime supporters of Penn State and parents of two Penn State graduates, Paul and Eleanor Chadderton feel great loyalty to the University. As business owners and active members of the Sharon community, Paul says they “have seen firsthand the important role the University plays in our area.” When the couple decided to extend their support with a gift to Penn State Shenango, they were thrilled to learn about a charitable lead trust (CLT), a gift that just “made sense to me,” Paul recalls. They appreciated the flexibility offered by a CLT. “It’s going to support our local campus for a few years and then whatever is left, our kids will still get something out of that,” Paul says. The Chaddertons’ CLT, created through a gift of $500,000, is providing a $20,000 annuity to Penn State Shenango for ten years, to be used at the chancellor’s discretion to meet pressing campus needs. The trust’s first distribution provided $15,000 in scholarship support to students attending Penn State Shenango. The remaining $5,000 partially funded a spring break service trip in March 2011, when fourteen students traveled to Peru to help indigenous families replace their traditional open-pit fire kitchens with clean-burning stoves and chimneys. The couple experiences great satisfaction knowing that their gifts support deserving students as well as the local community. “It makes you feel really good to know that you are helping somebody,” Paul says. “We’ve kept track of some of these kids [after graduation], and a lot of the students we’ve sponsored have really excelled. These things make us want to do a little bit more and a little bit more.”

To learn more about this unique

giving opportunity, please contact

Mike Degenhart at 888-800-9170.





























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Vytas Pazemenas


How Will 2012 and 2013 Tax Law Changes Affect You?Continued from Page 1

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Vytas Pazemenas


How Will 2012 and 2013 Tax Law Changes Affect You?Continued from Page 1

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taxpayers in 2012.




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