FALL 2

007

Building a LegacyA newsletter from the William Mitchell Institutional Advancement Office

When Tom Berreman ‘70 attended William Mitchell College of Law nearly all of the students worked full time at their jobs during the day and attended law school in the evening. In addition to this rigorous work and school schedule, many of the students were married and raising families. Berreman was no different. He ran his own business during the day – a hardware store – and attended night school at William Mitchell. Back then, he and his wife joked that they had heard that going to evening law school was a good form of birth control. (It didn’t work for them, as a fourth child joined the family during Berreman’s second year at Mitchell.) When Tom graduated, he was offered a job at West Publishing, where he spent his career. Like many of William Mitchell’s alumni who attended school in the

evenings after work, Berreman found that it was not easy to develop close relationships with his classmates. Typically he would rush to the school from work and then dash home to catch a glimpse of his family, grab a bite to eat, sleep, and then get up for an early morning study session before another day at work. It was tough, but he got through it. Even though it was difficult, Berreman is appreciative of the opportunity that William Mitchell provided. Without William Mitchell, the only school that offered a part-time program, Berreman said he would not have been able to get his law degree that led to a lifelong career that he enjoyed so much. In talking with William Mitchell alumni, the phrase “the law has been good to me,” is uttered again and again. When Berreman met with the Dean of the Law School and heard about the critical need for scholarships, he felt this was his chance to give back some of what William Mitchell had given him. He started the Thomas H. Berreman Scholarship Endowment to help bright law students beginning their second year of law school and who had performed well in their first year but had not received any academic scholarships. “I decided to go beyond a basic scholarship and attempt to fill a special need,” Berreman said. “The college was lacking in this type of scholarship that could benefit second-year students who might consider dropping out or transferring for financial reasons.” Wanting to make a

Continued on Page 3

Tom Berreman ‘70 and Joanne Kane

The Law has Been Good to MeBerreman ‘70: Giving Back to Mitchell I decided to go beyond

a basic scholarship and attempt to fill a special need. The college was lacking in this type of scholarship that could benefit second-year students who might consider dropping out or transferring for

financial reasons.

“

”

Deferring Capital Gains Taxes (forever) with Section 1031

Thursday, December 6, 20077:30–9 am

Adjunct Professor Jeff Peterson discusses deferring capital gains taxes (forever) with Section 1031 Tax Exchanges. Application will be made for 1 CLE credit. Cost: $10. Location: William Mitchell campus, Room 319.

Appreciated property such as real estate, art, or property provides many opportunities and benefits for funding a charitable gift. In fact, long-term appreciated property can be advantageous from a tax perspective. Even more so perhaps than writing a check to your favorite charity. When long-term property is given to a qualified charitable organization like William Mitchell, it is deductible for its full fair market value, and the donor pays no federal capital gains tax on the appreciation in value. If the asset would otherwise be sold, now or in the foreseeable future, not having to pay the federal capital gains tax is in reality a tax savings. When combined with the charitable deduction, it provides a dual tax benefit. The following example illustrates the benefits to the donor of making a gift of appreciated property: John and Mary want to make a stock gift of $10,000. They have a federal income tax rate of 28 percent, which is not subject to state or local income taxes. Their cost basis, the value of the stock when they acquired it, is $4,000. In the example below, making a gift of stock instead of writing a check saves an added $900. A higher federal tax bracket, and any state or local income taxes, would further improve results. Other examples of appreciated property that may be gifted to your advantage include closely held stock; real property with a low cost basis; and tangible personal property if it is related to the work of the recipient charitable organization.

Giving Appreciated Property Gives You Advantages

The information in this publication is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are based on current rates at the time of printing and are subject to change. References to estate and income tax include federal taxes only; individual state taxes may further impact results.© The Stelter Company

You can make a difference for William MitchellOur team of development professionals can help you and your estate planning advisors develop a plan to satisfy both your family and philanthropic goals.

Contact: Lisa Barton ’97, 651-290-6357 lisa.barton@wmitchell.edu

Marie Ruzek ’01, 651-290-6412marie.ruzek@wmitchell.edu.

And if you have not yet included the law school in your plans, there are several ways to become a Mitchell donor:

• Cash and pledges • Stock and other securities • Real estate • IRA and retirement assets • Income-producing gifts • Charitable lead trusts • Life insurance • Estate gifts

To ensure that we honor your wishes, please call Institutional Advancement at 651-290-6370 if your plans change.

A Gift in Your WillAn Easy Way to Turn Your Good Intentions in to Action

Sample Bequest LanguageI give William Mitchell College of Law, 875 Summit Avenue, St. Paul, MN 55105, (____% of the residue of my estate) or (the sum of $______), to be used wherever the needs and opportunities are greatest.

Wil

lia

m M

itchell C

ollege o

f L

aw

Cash gift Net cost of gift

Gift to be made $10,000 cash $10,000

Marginal income tax rate x .28

Tax savings from deduction $ 2,800 (2,800)

Net cost of cash gift $7,200

Stock gift Net cost of gift

Gift to be made $10,000 in stock $10,000

Cost basis (4,000)

Capital gain if sold $6,000

Capital gains tax rate x .15

Capital gains tax avoided $900 (900)

Tax savings (same as above) (2,800)

Net cost of stock gift $6,300

2

William Mitchell’s Heritage Society was established to recognize all those who have included William Mitchell College of Law in their long-term philanthropic plans through a bequest, life-income gift, or other planned gift arrangement. Among William Mitchell’s most valued supporters, members of The Heritage Society have determined that their legacy will make a difference for generations of bright law students and secure a thriving future for our law school. Currently, membership in the Heritage Society includes 85 alumni and friends of William Mitchell. Included among those we are honored to recognize as Heritage Society members are Minnesota Supreme Court Justices, young parents, and many successful attorneys. Several Heritage Society members will make a difference through scholarship gifts for promising students. Others choose to support the clinics, public service or the intellectual property institute. The

common link between them is they’ve all chosen to give back by leaving a legacy to support William Mitchell. Any kind of legacy gift—including a gift in your will, trust, retirement plan, life insurance policy, or an income-generating gift, such as a charitable gift annuity or charitable remainder trust, makes you eligible for membership in the Heritage Society. If you have already included William Mitchell in your estate plans, we hope you will let us know. Your willingness to be listed as a member of the Heritage Society encourages others to follow your example. We acknowledge and respect those who wish to remain anonymous, but we urge you to notify us of your plans on a confidential basis. Please allow us to thank you in this special way for playing such an essential role in William Mitchell’s heritage and future. As a member, you will be recognized in William Mitchell’s annual report and Wall of Honor on campus.

Feature continued from Page 1

difference for these students, he chose to establish the scholarship with donations of appreciated stock. By funding the scholarship with appreciated stock, Berreman received the benefit of a tax deduction for the value of the stock and avoided paying capital gains tax. Because of these tax benefits, he said giving appreciated stock to start the scholarship “made it easier.” Berreman also wanted to include a donation to his scholarship in his estate plan. After talking with a representative from William Mitchell’s development office, he named William Mitchell as a beneficiary of his IRA. With this plan, if he needs income from his IRA, he will be able to access it. When he is gone, the IRA will go to benefit students through the Berreman Scholarship. Berreman said this IRA gift was very simple to set up. “All you have to do to give your IRA is change the beneficiary form with your IRA custodian,” he said. In recognition of his planned gift, Berreman was welcomed as a member of William Mitchell’s Heritage Society. To learn more about the Heritage Society, see the article at right. An IRA can be one of the best assets to use for a charitable bequest. While normally an inheritance is exempt from income tax, distributions from an inherited IRA to a child or heir are usually fully taxable. By making this future gift commitment, Berreman will significantly increase the size of his scholarship and the number of students he will be able to help. Understanding the importance of annual donations to William Mitchell, Berreman continues to make leadership level annual gifts (gifts of $1,000 or more to the annual fund are considered leadership level gifts) to keep the school strong. In fact, this year, he fulfilled his annual fund commitment by taking advantage of the Pension Protection Act which allows individuals age

Join the Heritage Society at William MitchellGiving Appreciated Property Gives You Advantages

70 1⁄2 years or older to make donations up to $100,000 directly from their IRA to charity tax-free. This is a great arrangement for alumni and friends who want to support William Mitchell and use their IRA assets to make a difference. The Pension Protection Act is only in effect until Dec. 31, 2007, so act now to take advantage of this unique opportunity. You can learn more

about the Pension Protection Act on William Mitchell’s Web site at www.wmitchell.edu/alumni. Berreman’s scholarship has been awarded to promising William Mitchell students for nine years now. The Berreman Scholarship is truly a legacy for Berreman and his family (his son is also a William Mitchell graduate) that will last forever.

Wil

lia

m M

itchell C

ollege o

f L

aw

3