Last Will and Testament
A Lasting Testimony
Individuals are often able to make significant gifts to family, close friends, and special charities through their Last Will and Testament, especially when there is not a surviving spouse. Gifts to family may be outright bequests, or they may be in the form of trusts. Gifts to charity may also be outright bequests, or they may be deferred gifts such as charitable remainder trusts or charitable gift annuities. Charitable gifts made at death are generally eligible for estate tax deductions. The charitable remainder trust provides an exciting opportunity to create a legacy for both family and charity—a concept best described as "Giving It Twice."
An illustration of "Giving It Twice."
Example: Elizabeth Tyson was a widow with three grown children and she and her husband had worked hard to earn what they had accumulated. She loved her children and wanted to pass the estate on to them at her death. She also loved her church and its active missions work. In her Last Will and Testament, she created a charitable remainder annuity trust paying a 7% fixed payment to her children for a term of 15 years based on the value of her entire estate. At her death, the total estate came to $200,000, and so her children received checks from the Baptist Foundation in the amount of $14,000 each year for a total of $210,000. After making these payments, the trust rolled over into a permanent endowment in Elizabeth and John’s name, paying annually to her church for mission causes—and it will pay the income until Jesus returns. Elizabeth had indeed given her estate twice, once to family and then again to the Lord’s work.
One key point to remember when doing estate planning is that not all assets are transferred at death by Last Will and Testament. Life insurance, retirement accounts, deferred annuities, and the like are called non-probate assets and are transferred by using a beneficiary designation form. Check with your advisor for your specific situation.