For one 1964 Kansas State University graduate and her husband, making a large commitment to the university could not be any more rewarding. Karen and Jim McMillen are gratified to know their money will one day help students receive a college education.

Karen is a native of Valley Falls, Kan., and has fond memories of K-State. She recalls an elementary education class that visited a nursing home weekly.

“The elderly knew which day we were going to visit, and it would be the highlight of their day,” she said.

Karen also enjoyed her student teaching experience in Junction City, Kan. She said she learned a great deal from the mixture of military and non-military children who attended the elementary school.

Karen and Jim were introduced by a mutual friend in 1964 at a Wichita, Kan., service station. Jim is a native of Wichita, and Karen was in her first year of teaching there. Although the setting may not have been the most romantic, their relationship flourished and they married in July 1966. Jim went to Kansas Newman College in Wichita where he was a member of the 1967-68 basketball team. They then moved to Parkville, Mo., where Jim continued to play basketball and became a member of the golf team. He graduated from Park College in 1971 with a bachelor’s degree in psychology. Karen was teaching third grade in the North Kansas City school district at the time.

Karen and Jim both received their master’s degrees in education at Central Missouri State University — Karen in 1975 and Jim in 1973. Jim also received his education specialist degree in 1975. That year, they moved to a place neither of them had heard of before, Medicine Lodge, Kan., where Jim became the high school’s head basketball coach and physical education teacher.

“The basketball team was less than perfect,” Jim reflected. “But we both truly enjoyed our time there.”

Karen became a reading specialist for first through fifth grade. As avid golfers, they worked to promote the junior golf program in Medicine Lodge.

Karen and Jim now reside in Bella Vista, Ark. Karen retired from the Bentonville School District after teaching third and fourth grade for many years. Jim is a retired golf professional at Bella Vista Village and a lifetime member of the PGA of America. They still enjoy golfing and their collection of Corvettes, and recently celebrated their 43rd wedding anniversary.

Karen and Jim have each made bequests to K-State. Karen’s will support the College of Education, specifically elementary education. Jim’s contribution will benefit the golf team.

“Karen truly enjoyed her time at K-State,” Jim said. “We don’t have any children, and we know how much it costs to go to college. Since we are very fortunate to have a little bit of money to give, we might as well give it to someone to create scholarships and see if we can help some kids go to college.”

“If anybody has the opportunity to give back to a university, and if you can find the way to do it, then go for it!” said Karen. “It is very fulfilling to know that this is going to be happening. We need teachers out there, and we need people in the sports area also — maybe they could even become a famous golfer.”

By making bequests, Karen and Jim are able to retain total control of their assets during their lifetimes. These gifts to the university will benefit future students, and help the McMillens leave their legacy at K-State.

Appreciating the past, and planning for tomorrow Gift planning opportunities for K-State alumni and friends

By Katie Niederee

Nonprofit Org.

U.S. Postage

Paid

Manhattan, KS

Permit No. 525

KSU Foundation Center

2323 Anderson Ave., Suite 500

Manhattan, Kansas 66502-2911

LEGACYEDUCATORS LEAVE THEIR

AT K-STATE

PLANNING FOR

TOMORROWFall 09

Karen and Jim McMillen

Johanna Scott has decided to leave her estate to K-State in honor of her husband Ridge Scott, a 1951 and 1955 K-State graduate.

Johanna Scott came from modest means. The daughter of an Austrian butcher who settled in Kansas, Johanna never dreamed that one day she would dine in a friend’s European castle and the next day leave a sizable estate to a top university.

“My husband, Ridge Scott, attended K-State to study engineering before the war [World War II] on a swimming scholarship,” Johanna said. “He was called up during his last year, and he joined the military and went to Europe to serve as a combat engineer with the Big Red One building bridges and airfields.”

Ridge and Johanna were married on January 1, 1949, while Ridge was in the Army. “I knew he would never forget our anniversary if we were married on New Year’s Day,” Johanna joked.

Ridge was in D-Day at Omaha Beach and in the Battle of the Bulge. He was injured twice during his service, and achieved the rank of major by the age of 25. Although he came from a family of doctors and military officers, he decided against a military career.

All his family thought he was crazy, Johanna recalls. “But he always loved animals, and he decided he wanted to be a veterinarian,” she said.

Ridge and Johanna returned to K-State for his veterinary training. Johanna worked as the personnel director at K-State, serving under Presidents Eisenhower and McCain in Anderson Hall.

“Ridge had a great affection for K-State, and I do too,” Johanna said. “The best time of my life was when we were at K-State. We lived on $10 a week, but we made good memories in Manhattan.”

Ridge was a bright scholar, and was elected to membership in Sigma Xi, a prestigious scientific research society, while still a student. He also won the Upjohn Award for the top small animal veterinary student. After graduating first in his class in 1955, Ridge worked in a small veterinary clinic in Missouri while Johanna worked at the University of Kansas as the registrar in the School of Nursing. Shortly after, the couple opened Blue Ridge Animal Clinic in the Kansas City area. Ridge eventually became the chief research veterinarian at Quaker Oats in Barrington, Ill., where Johanna still resides.

Ridge passed away at the age of 62, before the couple had made an estate plan. Johanna and Ridge

had no children and neither of them had siblings. She knew that Ridge would have wanted their estate to go to K-State.

When Johanna made her will she chose to establish scholarships at K-State. She also used some of her assets to create a charitable gift annuity, which creates income for her throughout her life, and will ultimately support the College of Veterinary Medicine at K-State as well.

“When the foundation told me the gift annuity rates, I thought it was a great investment,” she said. “I get a quarterly check, and I only pay income tax on half of it.”

The foundation will receive all of her assets as specified in a bequest in her will — stocks, antiques, furniture, her house and property. Johanna and Ridge traveled extensively and over the years they collected antiques, European wood carvings and beer steins. Johanna still gives lectures on the latter two collectibles.

“I decided I wanted everything to go to K-State,” she said. “I feel the future for our country is in our young people. Education is the most important gift you can give.”

Americans in general and K-State alumni and friends in particular are known for their charitable nature. It is important, however, in making charitable gifts that proper steps be taken to protect the charitable deduction for state and federal tax purposes. Record keeping is the key.

When individuals are making charitable contributions, for those contributions to be deductible, the donations must be made to a charitable organization that qualifies under the Internal Revenue Code and its regulations. In recent years, the IRS has placed greater focus on proper documentation on charitable gifts and in requiring appropriate documentation for all deductions taken as charitable deductions. Receipts are critical. For all cash contributions a donor must keep a record of the amount and date of the contribution, along with the name of the charitable organization. In fact, any contribution of $250 or more must have a proper written acknowledgement from the entity to allow a charitable deduction to be taken on a tax return. The best record is a letter or receipt from the organization or entity to whom the payment is made, recognizing the donation, its amount, and reflecting whether any goods or

services were provided in whole or in part in return for the donation.

Gifts of property or investments require even greater documentation, based upon the level of the gift. Such non-cash gifts can include an outright conveyance of an asset, or could involve partial interest in property, such as a remainder interest in a personal residence or farm. Many donors find they can maximize tax savings by gifting appreciated property as opposed to cash. In most instances, the KSU Foundation staff is able to facilitate such gifts. In making any gifts other than cash, a review of the intended gift and the potential method of receipting should be discussed with foundation staff in advance. The foundation staff is happy to assist with the proper receipting of any gift.

Evidence of a gift with appropriate documentation is critical to assure recognition by the IRS of its deductibility against taxpayer income. KSU Foundation stands ready to assist in proper documentation of all charitable gifts made to the foundation and in providing to its donors the necessary records to protect any charitable deductions.

By Flavia Hulsey

WIFE ESTABLISHES

CHARITABLEPROTECTING YOUR

Editor’s note: Since we are frequently asked about the proper way of substantiating gifts to the satisfaction of the IRS, we invited guest author Curt Frasier to provide some guidelines.

Frasier is a partner with the law firm of Frasier & Johnson LLC in Beloit, Kan. He graduated from K-State in 1973 with a degree in agriculture and received a juris doctorate from Washburn University in 1976. Frasier is a member of the executive committee of the KSU Foundation and serves as treasurer of the foundation’s board of trustees.

CONTRIBUTION

SCHOLARSHIPIN HUSBAND’S HONOR

Ridge Scott

Charitable gifts to K-State help us meet our most pressing needs — from scholarship support to building enhancements. Your gifts now and in the future make a difference while creating your legacy at K-State.

Your gifts can take multiple forms, and they can help you reach your personal financial goals while also helping K-State. Planned gifts, in particular, are flexible and diverse. They can be established at any dollar value and through a variety of charitable giving vehicles.

Like Johanna Scott (see opposite page), you may choose to combine two or more giving vehicles in order to reach your philanthropic and financial planning goals. Speaking with your financial or tax advisor and the gift planning officers at the KSU Foundation can help you determine which vehicles best suit your needs. Two popular options that you may want to consider are a bequest and a charitable gift annuity (CGA).

A bequest is a gift made through a will or trust that enables you to retain total control of assets during your lifetime and determine the distribution of assets upon your death. Options include a percentage of your estate, real estate, a specific sum or asset, or the residue of your estate.

Benefits of a bequest include:Ease of giving — It is a simple way to make future gifts to the university while retaining control over property during your lifetime.

Flexibility — Your bequest can be made for a percentage of your estate, specific amount or asset or the residue of your estate.

Estate tax charitable deduction — Your bequest may be fully deductible from your taxable estate, which may reduce your estate taxes.

Control — You retain use of all of your assets for the duration of your lifetime.

A charitable gift annuity is an agreement made between you and the KSU Foundation that enables you to transfer a gift of cash or appreciated assets. You receive a current income tax deduction and the foundation pays a fixed amount for life to one or two people whom you designate. Annuity payments may begin immediately or may be deferred to a future date. When the annuity ends, the remaining assets are used for the purpose you designated.

Benefits of a charitable gift annuity include:Life income — Attractive annual income for yourself and/or your spouse or another individual.

Tax savings on the gift — A generous portion of your gift is immediately deductible as a charitable gift.

Tax-free income — A portion of your annual payment is tax-free.

Possible estate benefits — If, at the time of your death, there is a remaining value in your annuity, your estate may claim this value to reduce taxes.

You determine the legacy you leave behind.

Bequests and charitable gift annuities allow you to decide what your legacy will be and the kind of impact you will have on the future. You can earmark your bequest for scholarships, programs, equipment, facilities, or simply for use where most needed. Whatever you choose, you’ll have the satisfaction of knowing that your gift will live on at K-State, providing services and improving people’s lives for years to come — just as you wanted, and just as you planned.

Please contact our Gift Planning Department at 785-532-7531, or at giftoptions@found.ksu.edu, for more information on making your philanthropic impact at K-State.

Please send me a free, confidential

personal illustration on the following:

o C

haritable remainder unitrust

o C

haritable gift annuityo

Deferred gift annuity

I would also like m

ore information on

making a gift of:

o Securities

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ther _______________

o Life insurance

o O

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o Real estate

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I am interested in m

aking a gift to support:

o Research

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o Scholarships

o Faculty enhancem

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o G

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niversity Foundation in my/our w

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Address

City, State, ZIP

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Spouse’s name

Spouse’s birthdate

We urge you to discuss your tax planning

with your accountant or other financial

advisor.

PLANNING FOR

TOMORROW

FALL 09DIFFERENCE

CREATING A PHILANTHROPIC

AT K-STATE

www.found.ksu.edu/pft

From left to right: Kent Sedlacek, senior director of gift planning; Lori Rogge, associate director of gift planning; Gordon Dowell, gift planning officer for extension and real estate; Darci Cain, gift planning officer; Sarah Ptacek, gift planning coordinator.

For more information:KSU Foundation2323 Anderson Ave., Ste. 500Manhattan, KS 66502-2911785-532-7531 • 800-432-1578giftoptions@found.ksu.edu

Planning for Tomorrow

is published by the KSU

Foundation. For more inform

ation, please call 800-432-1578or visit our W

eb site at ww

w.found.ksu.edu. E

ditor: Flavia Hulsey. Layout artist: Shaun K

irmer.

Click on “Ways to give” to discover more ways you can make an investment in the people and programs at Kansas State University, reduce your tax burden and provide a secure income for you or your family.

Planned gifts • Gifts of real estate • Gifts of securities or mutual funds • Gifts of personal property • Give now

As part of the Emergency Economic Stabilization Act of 2008, Congress allowed an important window of opportunity to remain open — one that enables IRA owners age 70-1/2 or older to directly transfer up to $100,000 tax-free to a charity in 2009.

Is transferring money from your IRA to K-State right for you?

The ability to transfer money tax-free from your IRA to contribute to a charity can be an excellent way to advance both your philanthropic and estate plans. While you will not receive a charitable deduction for a transfer from your IRA to a charity, the amount of your transfer will never be included in your gross income.

If any of the following apply to you, we encourage you to contact your financial and tax advisor before the year’s end to help determine if this opportunity is appropriate for you.

• Do you have a large IRA that will be subject to estate taxes at death? IRA assets are subject to estate taxes, and heirs may have to pay income taxes on IRA assets they inherit. Using the IRA charitable-distribution provision permits an IRA holder to reduce the size of his or her estate, thereby reducing the total amount of taxes imposed.

• Do you take the standard deduction when calculating your taxes or do you itemize? Many retirees take the standard deduction when calculating their income-tax liability because they don’t generate enough deductible expenses or income to make itemizing worthwhile. As a result, they could be losing out on the tax advantages of deducting their charitable donations. An IRA holder who uses the tax-free IRA charitable-distribution provision as a way to make charitable contributions may be able to obtain the tax benefit of the contribution without having to itemize deductions.

• Are you collecting Social Security? An IRA holder who collects Social Security is usually required to receive the required minimum distribution (RMD) from his or her IRA at age 70-1/2.* The amount of the RMD could increase income to a level where a portion of your Social Security benefit is taxable. By using the IRA charitable-distribution provision, the IRA holder may reduce total income and thereby reduce the taxes imposed on Social Security benefits.

• Are you interested in donating more than 50 percent of your annual income? Donors who itemize their taxes are prohibited from deducting more than 50 percent of their adjusted gross income (AGI) for the purpose of making charitable donations. However, donations from an IRA are excluded from the percentage limit, allowing individuals who have reached the 50 percent threshold to give more.

USING YOUR IRATO MAKE A GIFT TO K-STATE

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• Did you wish to complete a gift to K-State for a particular purpose? Charitable-minded individuals may have in mind ambitious programs such as underwriting a research project or sponsoring a scholarship program, but are hampered from making any contributions by current tax laws such as the 50 percent AGI charitable-contribution limitation for cash contributions discussed in the previous paragraph. The IRA charitable-distribution provision may be an ideal strategy for an IRA holder to make a substantial donation in 2009 and fulfill these charitable goals in a tax-advantageous manner.

• Do you live in a state with unfavorable tax rules for charitable deductions? The ability to make a tax-free transfer to charity from an IRA could be especially appealing to residents in states that impose state income tax on IRA distributions and don’t allow any offsetting charitable deductions. The act permits the IRA holder to make the charitable contribution directly to a qualified charity from his or her IRA and not have to treat the contribution as a taxable IRA distribution, thereby avoiding any state or local tax imposed on IRA distributions.

* In an attempt to cushion damage from the severe stock-market decline, the Worker, Retiree and Employer Recovery Act of 2008 suspended required minimum distributions (RMDs) from 401(k) plans, IRAs and similar retirement accounts for 2009.