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Frequestly 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.
Please note, individual
financial circumstances will vary. The information on this site
does not constitute legal or tax advice. Donor stories and photographs
are for purposes of illustration only. As with all tax and estate
planning, please consult your attorney or estate specialist. All
material is copyrighted and is for viewing purposes only. Use of
this site signifies your agreement with the terms
of use. The content in this Planned Giving section has been
developed for the California Symphony by Future
Focus. Please report any problems to webmaster.
Revised: January 10, 2008 15:41.
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