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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 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).
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.
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Jim and Darla Wainscott came to Good Samaritan Hospital’s Seton
Center for Advanced Obstetrics and Gynecology for their second pregnancy,
following the full-term stillbirth of their first child.“Our expectations
were high, and the Seton Center’s doctors and staff served us with
exemplary care and compassion as we embarked on another long journey
to parenthood,” said the Wainscotts.
“A stillbirth is any expectant mother’s worst fear, and actually
having that fear become a reality was something that I never really
anticipated,” Darla said,“and nothing that I had encountered in
life to that point had prepared me for such a tumultuous rearrangement
of plans.” While imploring their hearts and faith in the aftermath
of this personal tragedy, they decided to make a variety of gifts
to the Hospital with the goal of assisting those families who had
experienced medical difficulties during their childbearing years.“Not
only did Good Samaritan Hospital Foundation make it possible for
us to achieve this objective in a manner consistent with our value
structure, they also presented sound advice to maximize our gift-giving
potential,” said Jim and Darla.  A
gift of life insurance was one of the arrangements Jim and Darla
pursued in order to achieve their goal of supporting a Perinatal
Research Center at Good Samaritan Hospital.
“With the sincerest of gratitude to the Seton Center at Good Samaritan,
and in particular to Dr. William J. Polzin,we now have three beautiful,
healthy children: Benjamin (6), Maria (3), and Sarah Grace (10 months).”
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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. You should also review your will if there are any significant changes in law.
Can I use my insurance to benefit
charitable organizations? (note - see story on right) 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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