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Sigma Chi Planned Giving- We Can Help!By Walt Kero ‘73

The following is a discussion and story of a planned gift my wife Patty and I made to the Shi Shack Fundraiser.

First, why donate to Ski Shack? The gift is a planned donation to assist in the funding of a House Director on a long-term basis. Beta Delta now has a House Director in place and living in Ski Shack. The purposes of a House Director are many, including promotion of and assistance of leadership and scholarship. It is my hope that SCBF can provide a living and learning environment that will incubate future leaders, successful members of their chosen profession (Significant Sigma Chis) and successful members of Sigma Chi (Constantine Sigma Chis).

Our story begins with a purchase a long time ago of a life insurance policy from Brother Mark Nelson who was a Northwestern Mutual Life Insurance agent. The policy for $100,000 of coverage was purchased as a backup to help with a mortgage should Chapter Eternal come early. I paid the premiums for about 12 years. During this 12 year period we converted the whole life policy to a universal life insurance plan. Later I quit making premium payments. The cash value had grown enough by that time to cover the premium payments.

We fast forward to 2015. Patty and I build a home to retire in near Hog Heaven Cattle Company in Dayton, Montana. Unfortunately, we go through Dodd-Frank loan compliance hell and decide to bite a bullet. We cashed out enough retirement to pay off the construction loan.

One big problem with cashing out retirement to pay off a loan, in our case, is the tax bill that comes along with issue of being debt free. I then looked to plan on reducing the tax bite and used the following tax plan.

Montana tax laws include an endowment tax credit of up to $10,000 per taxpayer or in the case of a joint return, $20,000. It is important to note this is a tax credit, not a deduction. A tax credit directly reduces your tax and does not reduce your taxable income. The ingredients necessary for the endowment credit are a “planned gift” by the donor(s), a Montana 501(c) (3) organization and a Montana income tax liability.  It just so happens that the Sigma Chi Building Foundation (SCBF) is a Montana 501 (c) (3) charity. SCBF gets charity status based on two functions. First, SCBF is preserving a national, historic registered property and second, SCBF has a scholarship fund. In fact, the SCBF fund when added to two other funds at the Sigma Chi Foundation and the UM Foundation exceeds $1,000,000.

Patty and I decided to pay-off the loan on the life insurance policy and then donate the paid up policy to Beta Delta’s SCBF. We obtained a $58,000 charitable donation deduction on our Federal taxes and we obtained a $20,000 tax credit against our Montana tax bill. Our choice to gift the life insurance policy to SCBF was easy. We could have paid about $40,000 of additional income tax but instead we gifted the policy. We chose to give to SCBF rather than more to the tax man.   

Planned gifts are not easy or for the faint of heart. However, planned gifts are effective tools to reduce income or estate taxes. The above discusses but one example of planned giving. Fortunately, for Beta Delta Sigma Chis, we have the infrastructure in place and tools available to help you should you have tax problems.

In hoc,

Walter J. Kero, CPA

President Sigma Chi Building Foundation

Beta Delta Sigma Chi ‘73

Core Values, Vision, and Mission

Core Values
Sigma Chi’s core values are Friendship, Justice and Learning. Our vision is to become the preeminent collegiate leadership development organization — aligned, focused and living our core values. Our mission is to develop values-based leaders committed to the betterment of character, campus and community.

Vision
The fundamental purpose of the Sigma Chi Fraternity is the cultivation, maintenance and promotion of the core values of Friendship, Justice and Learning.

Mission
In the pursuit of these high ideals, the Sigma Chi Fraternity is able to offer tremendous value in augmenting the collegiate experience and supporting the lifelong journey of each of its members. We hope to assist brothers in becoming men of character, caring husbands, compassionate fathers and community leaders.