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.
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 Prevent Blindness
Florida by Future Focus.
Please report any problems to section
webmaster. Revised: August 8, 2008 11:17.
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