
Farming the Future
For Diane Wojtanowicz, a planned giving program will support the local causes and community that have shaped her life.
By Gene Rebeck | Photography by Michael Schoenecker
Diane Wojtanowicz knows a great deal about maintaining a legacy. She represents the fourth-generation ownership of Prairie Farm Co. in Rice, north of St. Cloud. Her operation is one of the largest potato producers in the state; Prairie Farm also raises kidney beans and corn.
It’s a legacy that Wojtanowicz wants to pass on to her six children and her home region. That’s why, about a year ago, Wojtanowicz went to visit her estate planner, attorney Lee Hanson. She was looking for ways to protect some of her assets from taxation after her death.
Hanson, a principal with the St. Cloud office of Minneapolis-based law firm Gray Plant Mooty and a specialist in tax planning, had just the solution for his client. “She has a strong charitable intent, and a strong civic intent,” Hanson said. “She has served on numerous civic, business and charitable boards. She has a strong attitude about giving back to her community.”
Working with his colleague Betsy Whitlatch, an associate attorney specializing in estate planning, Hanson crafted a way to make an estate gift out of two of the individual retirement accounts (IRAs) Wojtanowicz holds. This planned giving program will provide benefits for her estate and the community she holds dear.
A beneficiary contribution plan “is one of the most efficient ways to give away your IRA money,” said Hanson, an Emeritus Trustee with the Initiative Foundation. “That’s because you avoid all income taxes on your IRA, which otherwise is subject to a full ordinary income tax. So she’d lose half of this money.”
What’s more, the money from those two IRAs will go to causes close to Wojtanowicz’s heart—health care and education. One of the beneficiaries is CentraCare Health Foundation, which supports educational programs, research and services where the health system operates.
The beneficiary of the other IRA is the Sauk Rapids-Rice Education Foundation (SRREF). Founded in 2012, SRREF provides opportunities for all students to excel by funding projects that fall outside the district’s normal operating budget. SRREF itself has two funds: one that addresses immediate equipment needs, and another endowment designed to fund broader programs. SSREF grants have supported summer garden planting, hands-on programs in science and technology and mentor connections that open students’ minds to potential career paths.
It was a nonprofit Wojtanowicz knew well, having served the foundation as an officer. SSREF is one of the 100-plus Partner Funds hosted by the Initiative Foundation. These funds let families, businesses, nonprofit organizations and volunteer-led groups build endowments that can contribute to the health of their communities. In 2017, Partner Fund grants with a combined value of nearly $850,000 supported education, recreation, environmental improvements and community enhancements throughout the region.
Wojtanowicz has other IRAs, and will continue to receive distributions from them during her retirement years. And, she’ll be leaving Prairie Farm Co. to the next generation of her family. Through her planned giving program, she’ll also be passing on a legacy of commitment to her community.
MAKING A PLAN
Sorting through planned giving options.
Like Diane Wojtanowicz, donors can combine financial savvy with philanthropic generosity by partnering with the Initiative Foundation.
“Making a gift through an established retirement plan provides not only tax savings but also benefits to the community,” said Mike Burton, external relations officer for the Foundation. “You’re contributing to something you believe in.”
To create a planned giving program that best fits a donor’s wishes, potential donors and their financial advisors can benefit from becoming aware of the many ways such
a program can be set up:
- WILL BEQUESTS AND TRANSFERS upon death are two well-known examples. But donors can also will the remaining assets of life insurance policies and retirement vehicles to nonprofits they designate. Many donors also bequeath stocks, art and real estate to charities upon their death.
- CHARITABLE LEAD TRUSTS use the proceeds from the donor’s assets, which are held in trust, to support one or more charities. Once the donor passes away, the remaining assets are passed on to family members or other beneficiaries.
- CHARITABLE REMAINDER TRUSTS can be drawn up in a couple of ways. Charitable remainder annuity trusts (CRATs) provide a fixed income stream during retirement. Upon the holder’s death, the remaining assets go to a designated charity, tax-free. A charitable remainder unitrust (CRUT) operates much the same way. The chief difference: With a CRUT, the holder’s income stream is variable, since the assets it holds are tied to the performance of the financial markets.
As these examples demonstrate, “there are a number of approaches that financial advisers can connect with their clients to make these kinds of gifts,” Burton said. In Wojtanowicz’s case, she could tap into the expertise of her estate planner, St. Cloud attorney Lee Hanson, an experienced tax attorney as well as someone with whom she has served on several nonprofit boards.
Nonprofits also can help donors become aware of these possibilities. They can do so directly by building relationships with people over a long stretch of time. Or they can work with a donor’s accountant, financial advisor, attorney or other professional who helps manage that person’s finances and estate.
Review your planned giving options or call (877) 632-9255 for more information.