Frequently Asked Questions About Estate Planning
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. 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. For more information, check out this Gifts of Life Insurance example.
How often should I update my will or trust?
Documents like wills and bequests 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.
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 these representatives will serve without fee, which is an additional incentive. There may be significant advantages to using your assets as a charitable contribution. For questions about how to name Gospel Rescue Mission as trustee of your charitable remainder trust, please contact Lisa Chastain, Associate Executive Director at 520-740-1501 ext. 7001 or by email at firstname.lastname@example.org
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 it is the sole trustee. Hopefully this will never happen, but things like that do. Gospel Rescue Mission has been ministering here in Tucson for over sixty years. If you have any questions about contributing to Gospel Rescue Mission by way of your trust, please contact Lisa Chastain, Associate Executive Director at 520-740-1501 ext. 7001 or by email at email@example.com
What is the difference between a charitable remainder uni-trust 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 or beneficiaries. 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 uni-trust are revalued annually. If the trust assets appreciate, the payment to the income beneficiary or beneficiaries will increase. If the trust assets depreciate, the payment will decrease.
Why would anyone want an irrevocable trust?
If a trust agreement is established as irrevocable, it means that it can’t be revoked (broken) except under unusual circumstances. 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. Other 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. If you have any questions about irrevocable trusts, please contact Lisa Chastain, Associate Executive Director at 520-740-1501 ext. 7001 or by email at firstname.lastname@example.org
Why have a will?
You might be asking yourself, "Should I have a will?" As with any decision, it's important to examine the costs and benefits, the pros and cons, to determine the best plan of action. Here are some points about what one can do if they have a will and some points about one may want to, but is unable to do without a will.
With a Will:
Without a Will: