Frequently Asked Questions
What
Is A Bequest? Bequests are the actual gift disbursals
that result, upon one's passing, from a specifically worded commitment
in a will or trust agreement. Bequests are unlike any other gifts
we receive because they represent individuals' final statements
about what is most important to them. Every bequest is a powerful
expression of loyalty, good will, and faith in the future of us
and our mission.
 I'm
Not Wealthy, Can My Bequest Still Make A Difference? You
do not have to be wealthy to create a legacy. A bequest of any size
can be significant in helping to preserve our mission and our reach.
I have a will. Do I need
anything else? In addition to a will, most experts recommend
that you have a durable power of attorney, which allows another
person to act on your behalf should you become incapacitated.
Also, a living will is helpful to your heirs in that it directs
at which point you do not want your life artificially supported.
Can bequests be handled in
a living trust? Certainly. You may wish to consider a
living trust as an estate planning tool. More
information is available. Living trusts may be either revocable
or irrevocable and there are advantages and disadvantages to consider
in both.
What happens
to my personal possessions? Personal possessions are best
distributed through a tangible personal property memo in which
you list the personal items you wish to give to specific people.
Your will must mention the existence of this memo and you should
keep a copy of it with your will.
If a trust agreement is established
as irrevocable, it means that it can't be revoked (broken) except
under unusual circumstances. Why would anyone want an irrevocable
trust? There are always specific reasons for making an
irrevocable trust agreement. Perhaps it involves a family business
where some of the family members are getting on in years and the
family wants to make certain that management continues to run
smoothly even if hindrances, such as senility, enter the picture.
Many times the reasons for an irrevocable trust involve estate
and/or income tax avoidance. In order to be successful in such
avoidance, the trustor must not have any direct or indirect power
or control over the trust property or income. The regulations
on this subject, set out in the Internal Revenue Code, must be
carefully followed.
What is the difference between
a charitable remainder unitrust and a charitable remainder annuity
trust? The major difference is in the valuation of the
assets of the trust, which establishes part of the calculation
for the determination of the amount of income received by the
income beneficiary(-ies). The annuity assets are valued at the
time the assets are placed in the trust and are never revalued.
Annual payments remain the same, whether the assets appreciate
(increase in value) or decline (lose value).
 The
assets in the unitrust are revalued annually. If the trust assets
appreciate, the payment to the income beneficiary(-ies) will increase.
If the trust assets depreciate, the payment will decrease.
What happens to my assets
in a trust for a charity if the charity goes out of business before
the expiration of the trust? Your trustee is authorized
to name a substitute, if that is the sole charity.
Should I name a charity as
trustee of my charitable remainder trust? This is often
done if the organization is qualified to so act under local law.
The organization's representatives can satisfy you in that regard.
Often they will serve without fee, which is an additional incentive.
How often should I update
my will or trust? These documents should be updated any
time your financial or your family circumstances change. As laws
vary from state to state, if you move you should have an attorney
licensed in and familiar with the new state's laws review your
will or trust agreement. It is always wise, even if there are
not any significant changes in your circumstances, to periodically
review these important documents. A good rule of thumb is to review
your will every three years.
Can I use my insurance
to benefit charitable organizations? Yes. This is an area
overlooked by many. You can name one or more charities as alternate
or as primary beneficiary. Furthermore, if you no longer need
the policy proceeds in your estate for use now, you can transfer
ownership of the policy to the charity or charities. If the policy
has cash loan value, the charity can draw this out and use it.
In this case, you not only receive a charitable gift deduction,
but any additional premiums you pay are tax deductible for you
now. And, on your death, the charity receives the balance of the
policy proceeds and none of it is included in your estate for
tax purposes.
How can I fund a charitable
gift annuity and how is my income calculated? The
usual funding sources for a charitable gift annuity are cash and
marketable securities. There can be tax benefits associated with
the gift of appreciated securities (the current market value exceeds
the cost or basis value). As a gift annuity is considered partially
a gift and partially an annuity, part of the gift avoids capital
gains tax entirely. Real estate and other marketable assets may
also be used. Generally, the charity will convert the assets to
cash to fund the annuity.
The income provided you by the annuity is determined by your
age and the age of any additional beneficiary and is calculated
using tables established and filed with regulatory agencies under
which the charity operates its annuity program.
Can I set up a charitable
gift annuity and delay the start of the income until I will more
likely need it, such as at my retirement, when my income is lower? Yes,
there is flexibility in the establishing of charitable gift annuities
that make them a popular and effective retirement planning vehicle.
Using a deferred gift annuity, the annuity earnings accumulate
on a tax-deferred basis. Thus the deferred payment annuity accomplishes
several things. First, the donor receives a tax deduction in the
year the annuity is established, which is usually when the donor
is in a higher tax bracket. Secondly, the gift to the charity
becomes larger as the deferred earnings increase the annuity's
principal. Finally, since the deferred payment annuity grows in
size while income is deferred, the ultimate income will be more
per year.
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