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
bequests be handled in a living trust?
Certainly. You may wish to consider
a living trust as an estate-planning
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
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
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 Internal Revenue Code and the accompanying Regulations should be carefully followed when considering irrevocable trusts.
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).
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
Should I name a charity as
trustee of my charitable remainder
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. You should also review your will if there are any significant changes in law.
Can I use my insurance to benefit
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
How can I fund a charitable
gift annuity and how is my income
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 gain tax entirely.
Real estate and other marketable assets
may also be used, but in many cases
acceptance of these kinds of assets
is often on a case-by-case basis.
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
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, the flexibility associated
with establishing charitable gift
annuities makes 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
. The content in this Planned
Giving section has been developed
for the Foundation of FirstHealth and is owned
. Please report any problems
to section webmaster