CREATING A $1 MILLION LEGACY FOR ST. JUDE MEDICAL CENTER FROM A NON-PERFORMING ASSET
Nick and Lee Begovich
It was a storybook ending when the 1951 Ferrari Vignale Berlinetta won first place in its class at Pebble Beach in August 2010.
A collector's car restored to mint condition, a $1 million legacy gift for St. Jude Medical Center, and lifetime income for the donors. A collector's assets can be a win-win-win for everyone!
It all began in 1958 when Nicholas Begovich paid $5,000 for a 1951 212 Coupe Vignale Ferrari. The sports car had an extensive history of racing and was in need of
restoration when Nick added the Ferrari to his growing collection of handcrafted European automobiles.
Nick carefully unassembled the car and purchased original parts from the Ferrari factory to restore the car. Housed in his private workshop and museum, the car was still waiting its turn for restoration in 2008.
When Nick and Lee Begovich decided to make a major gift to support the building campaign at St. Jude Medical Center, Nick chose to part with what he lovingly called a "non-performing asset" that had appreciated in value over the past 50 years to an appraised value of $1 million.
Nick understood the process of creating a charitable remainder trust , having used another car to fund a CRT for Caltech. Taking into account the current investment environment, Nick was particularly interested in making sure that the value of the car would result in a full million-dollar gift for the hospital
With the help of a team of lawyers and a financial services professional from New York Life Insurance Company, a remarkable planned estate gift was accomplished. A Charitable Remainder Annuity Trust was created, and the Ferrari was transferred into the trust where it was sold for $1 million. The funds purchased a guaranteed annuity from New York Life with quarterly payments that pay for a two-life (Nick and Lee) insurance policy with a guaranteed $1 million benefit for St. Jude Medical Center.
A key to this gift was the good health of both Nick and Lee, which allowed them to be fully insurable. "Being healthy older donors helped in achieving and guaranteeing the full $1 million estate gift for the hospital," noted Nick.
The donors are delighted, the hospital is extremely grateful, and the car - the new owner transported every piece of the Ferrari to the East Coast for restoration, with the intention to show the restored Ferrari at Pebble Beach in 2010.
When asked his reasons for making the gift to SJMC, Nick responded: "Healthy educated people are the most important asset of our nation. An unhealthy nation cannot compete or remain financially sound in the 21st century. St. Jude Medical Center's mission is the promotion of good health in all the residents of Orange County and adjacent neighborhoods. This promotion is accomplished by performing two tasks: education and repair.
"St. Jude cannot perform these tasks with only the funds it can earn; it needs the financial support of all of us. We all need to be reminded that St. Jude has only two sources of funds to pay for its facilities and equipment: earnings and gifts. New technology equipments are increasingly more sophisticated and expensive but they can give our doctors amazing capabilities to repair our bodies. These new capabilities need to be purchased and paid for long before they can produce income to pay for themselves. The recently completed successful capital fund drive to provide partial funding for the Southwest Patient Tower addition to St. Jude is a prime example of what gifts can accomplish These are some of the reasons why Lee and I have made this latest addition to our previous gifts to St. Jude."
