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Donna Winbon: We all have the power to make an impact on the next generation

Donna Winbon

 

In 1980, I graduated from Western Carolina University. I was an average student with a modest background and a deep appreciation for the faculty and staff who helped me get through four years of college. I knew even then that my time at WCU had prepared me for a good life, but I had no grand vision of becoming rich or famous.

And I didn’t. I worked hard. I found a career that I love – that fulfills me to this day – and I was responsible with my income. I built a life; I traveled whenever I could get away; I set aside savings for emergencies, and built wealth through savings and a retirement account.

Several years ago, I began to realize that I wanted my success to benefit others. As someone who advises clients every day about retirement and estate planning, I knew there were ways to give back while also leaving a legacy to your loved ones, and I knew I wanted to give back to WCU. In 2012, I walked into the Development office at Western Carolina University and began discussions about designating the university as the primary beneficiary of my 401K, a commitment of just over $1 million. Then, in 2015, inspired by the incredible momentum at my alma mater and talk of the Lead the Way Campaign, I made the decision to use some of my savings to endow a scholarship at WCU for high-achieving students with financial need.

You may be thinking: “That’s not me. I will never have that much to give.” Without a doubt, I recognize that I am incredibly blessed, and that not everyone can or will make a seven-figure gift to their non-profit of choice. That said, in my 20-plus-year career as a financial advisor, I have found that people often don’t realize how much they have to give or how to maximize their assets to make sure they take care of their family and leave a legacy at the time of their death.

Donna Winbon & Student

 

With most of my clients, there comes a time in their life when they are nearing the end of their career, have adequately saved for retirement, and are beginning to ask themselves: “How can I share my good fortune and impact others.”

My answer is always to ask what they are passionate about. What is important to them? What has played a significant role in their happiness and their success? Their answer almost always involves their church and/or their university.

My job at that point is to help them find ways to maximize their legacy. Often, that includes gifting strategies that minimize taxation on their inheritance. Here are some of the tips I often offer:

  • First, it is important to know that the government gets income tax on an inherited retirement account, including IRAs or 401Ks. So, anything your heirs take out of that account as a distribution is taxed to them as income. Gifting all or a portion of your retirement account eliminates taxes paid to the government by you or your heirs.

  • Clients with children often are concerned about gifting their retirement account and leaving their family without a legacy. I personally use life insurance to ensure my heirs will be taken care of because life insurance proceeds are not taxable as income. So, if you have $500,000 in an IRA, you can gift your retirement account and make your two children equal beneficiaries of a $1 million life insurance policy and accomplish both goals.

  • I should note here that beneficiary designations supersede wills. While it is important to have a clearly written will, you should also think carefully about your beneficiary designations, which may have even greater impact on your legacy.

  • If you are holding highly appreciated stock or mutual funds, you can avoid paying capital gains tax if you gift that stock to a charity. You can also write off the full value of the stock upon the transfer. This can allow you to make a significant cash gift even before your death. 

Like me, you may not be a CEO or a millionaire entrepreneur. But, I truly believe we all have the ability to be successful, and I also believe with smart planning we can share that success with the next generation through planned giving.

This year, the recipient of the Donna Winbon Endowed Scholarship will finish his sophomore year. There are no words for the joy I receive knowing how my success is impacting his life and will impact the lives of many to come. That joy, that love for others, that legacy for the future, is everything we spend our lives working toward. Knowing that my hard work will live beyond my own life is priceless.

Donna Winbon is a 1980 graduate of WCU, the Chair of the Lead the Way Campaign Steering Committee, and a financial advisor with Edward Jones in Raleigh. To learn more about making a planned gift, please visit here

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