Monthly Planning Tips Archive

Providing for a Spouse and Our Future, Too

Married couples who wish to benefit worthwhile organizations through their estate plans may prefer that all charitable bequests come from the estate of the surviving spouse.  Unfortunately, there’s no guarantee the survivor will remember to follow through.  Donors can ensure assistance to the causes they cherish by including gift annuities, charitable remainder trusts or marital trusts in their wills that provide lifetime income plus money management for a spouse.  Here is an example:

Mr. P, a patriotic saver, has accumulated $230,000 of U.S. savings bonds (Series I).  He plans to leave the bonds to Mrs. P, to provide for her security, but was surprised to learn that Mrs. P will have to pay substantial income taxes on every bond she cashes.  Mr. P decides to leave the bonds to a tax-exempt charitable remainder trust in his will.  The trustee can cash the bonds without owing income tax, reinvest the proceeds and pay Mrs. P a good income for life, and our programs will benefit only after her death.  Mr. P’s estate is too small to owe estate taxes, but the trust makes sense from an income tax standpoint and his desire to provide for future generations and his wife, as well.  Note:  Any co-ownership or beneficiary designations on the bonds will need to be removed or this plan won’t work.

Charitable Remainder Trusts for “Special Needs” Beneficiaries

The IRS has approved charitable remainder trusts that pay income to trusts for family members who, by reason of a physical or mental impairment, are unable to manage their own financial affairs.  The trustee of the special needs trust could have broad discretion as to how much income or principal would be paid to the beneficiary, and could take into account government benefits to which the beneficiary may be entitled. 

Assets in the special needs trust could pass at the beneficiary’s death either to charitable or family beneficiaries.  Proceeds from the charitable remainder trust would be paid, of course, for our benefit or to any qualified organization.

The Satisfaction of Memorial Gifts

The passing of someone close to you is rightfully a time for remembrance, reflection and recognition. Many people search for ways to commemorate the life of a husband, wife, dear friend or family member – to make a lasting statement about what that person meant to them. 

You can make a gift that will stand as a memorial to a loved one and at the same time advance our mission in a meaningful way.  It’s hard to imagine a more thoughtful, satisfying plan.  How you decide to honor this special person is up to you.   Possibilities include immediate gifts, bequests from wills or living trusts, and gifts from which you or family members keep lifetime benefits.  Many of our friends continue lifetime support for our mission through their wills.  Indeed, a bequest is often the ideal way to make a gift of significance and to memorialize your own life or the life of someone close to you.  Please call our office for details.

The Will the State Has Written for You

What would happen if you died without a will?   There’s an old saying that the state has made your will – if you haven’t done it yourself.  This means that your estate may pass to beneficiaries according to the intestacy laws of the state in which you reside at death.  Here is an example of an intestate's will that several states have drafted for people who die there (exact treatment would depend on where you are living at death):

                                                        Last Will and Testament

Being of sound mind and memory, I,    Wanda Will-Less   , do hereby publish this as my Last Will and Testament:
FIRST – I give my husband only one-half of my possessions, and I give my children the remaining one-half.
SECOND – Should my husband remarry, his next wife shall be entitled to one-half of everything my husband possesses, including his inheritance from me.  Should my children need some of this share for their support, the next wife shall not be bound to spend any of her share on my children's behalf.
THIRD – I specifically disinherit all the worthwhile causes and institutions that I have supported all my life.
FOURTH – Under existing tax law, there are certain legitimate avenues open to me to reduce death taxes.  Since I prefer to have my money used for governmental purposes rather than for the benefit of my husband and children, I direct that no effort be made to reduce taxes.
FIFTH – I appoint my husband to handle my estate, but as a safeguard, I direct that he give a Performance Bond to guarantee that he does everything exactly as he should.

IN WITNESS WHEREOF, I have set my hand to this my last Will and Testament this ______ day of ____________ 20____.

(Signed)     Wanda Will-Less   

Witnesses________________________
________________________________

Copyright © by R&R Newkirk. All rights reserved.