Estate Planning

[SunnyOne]

I am setting up my estate plan and have chosen beneficiaries, charities I would like to donate to. Also, a public library and maybe fund a scholarship at my high school.

I was hoping someone here could lend any experience or advice to the issue of - do I need to contact the charity or library ahead of time? do schools generally have offices to fund scholarships?


Is there a website or book recommended for the very beginner with advice and steps to get started? Thank you.


Also, I am ignorant as to the tax implications. Thank you.

 

[SecondCor521]

I'd recommend reading some Nolo press books on estate planning from your public library to get started.

Estate planning can vary from state to state, and lots of people have either incomplete or incorrect understanding of the topic. So I would only rely on my own state's laws, applicable federal laws, and what estate planning attorneys in my state say. (And sometimes the attorneys have a vested interest in what they tell you, so be aware of that.)

It would be good to contact your intended charitable targets ahead of time, for several reasons:

1. There are often charities with similar names. You want to get the charity's exact and proper name so that your donation goes to the specific charity you want.

2. Sometimes they'll send you invitations to events if they know you've listed them in your will. (On the downside, sometimes they'll remind you to keep them in your will.)

3. There might be specific questions to go through with them regarding where to apply your gift. For example, if you give to a university, can they use it to add to the football stadium, or just for academic scholarships, or something else?

Schools usually have a charitable scholarship foundation. If your gift is "small", then usually it goes into a general scholarship fund. If your gift is "large", you might be able to establish a named scholarship with specific guidance how to award it.

Tax implications can be complicated, but in general, there are no tax consequences to gifting to charity through your estate mechanisms. If you are very well off, it may be of interest to note that charitable gifts reduce the size of your federal taxable estate.

 

[TrvlBug]

Following. We are starting the process and with no kiddos and substantial assets, most of our $ will go to charities. Some will go to nieces and nephews.

 

[OldShooter]

I ...
Is there a website or book recommended for the very beginner with advice and steps to get started? ...

Planning and concepts is just fine for a beginner, but when it's time to get serious you really need expert help.

I suggest you start by contacting a nearby community foundation. These people can help with things like setting up your scholarships and gifts to libraries. They are also used to dealing with beginners and will be able to recommend the professional estate planning help that you will need as your plan develops. Try https://cof.org/foundation-type/community-foundations and https://cof.org/page/community-foundation-locator

 

[braumeister]

I've talked with reps at several charities and they are happy to assist in the process. They will provide all the legal forms and make sure they are filled out correctly, very little for you to do. So I would recommend a phone call to those organizations you're most interested in.

DW is planning to establish a scholarship at her alma mater, and when she mentioned it to someone in the alumni office, they were only too happy to schedule a visit to our home to explain the whole process.

 

[marko]

I'll go with my standard answer: talk to an estate attorney.

 

[Sunset]

If you are really well off, consider giving now as you get some tax benefits, and perhaps more importantly:

• You get to see they do the right thing with the money.
• You can always decide to change charities and try another one if the first choice fritters away your gift.

I always think of the librarian who Willed $4 M to his College to improve the library as he verbalized, but the College used $1M of it to put up a new scoreboard on the football field. $2.5M to expand the career center and only $100K for the library. .

https://www.insidehighered.com/news/2016/09/15/critics-question-spending-librarians-donation-scoreboard#:~:text=The%20Librarian%27s%20Bequest%20Alumnus%20and%20longtime%20library%20employee,on%20a%20video%20scoreboard%20for%20the%20football%20stadium.

 

[JBTX]

Donating out of traditional IRAs can sometimes have significant tax benefits.

https://www.fidelitycharitable.org/guidance/philanthropy/donating-retirement-assets-to-charity.html

 

[skipro33]

The only first hand advice I can give is this:
Do NOT will a percentage of your estate to a charity. Make it a fixed dollar amount. We have had no end of trouble with a parent to donated 5% of their wealth to a church charity. The estate included the house. The church is challenging the amount the home will be listed for, claiming it's worth more. And you know what? They can put a halt you selling your parent's home even though you are the executor of the estate because, as a beneficiary, they can require proof of all monetary value for every stinking piece of property right down to the rubber bands and paper clips in the junk drawer. And they will. In this case, it's stuff like record/album collection of over 50 years. There's nothing of value, being almost all Christian music albums, but we have to document and prove the value of each of the over 100 albums before they will concur on the estate value. What bulchit that is! Out of frustration, we told them we have decided NOT to sell the house, the records or rubber bands for that matter, and since the estate is not being liquidated, they get nothing, and they are 5% liable for the taxes and expenses. Have not heard back about that yet.

 

[RobbieB]

Praise the Lord.

 

[ncbill]

The only first hand advice I can give is this:
Do NOT will a percentage of your estate to a charity. Make it a fixed dollar amount. We have had no end of trouble with a parent to donated 5% of their wealth to a church charity. The estate included the house. The church is challenging the amount the home will be listed for, claiming it's worth more. And you know what? They can put a halt you selling your parent's home even though you are the executor of the estate because, as a beneficiary, they can require proof of all monetary value for every stinking piece of property right down to the rubber bands and paper clips in the junk drawer. And they will. In this case, it's stuff like record/album collection of over 50 years. There's nothing of value, being almost all Christian music albums, but we have to document and prove the value of each of the over 100 albums before they will concur on the estate value. What bulchit that is! Out of frustration, we told them we have decided NOT to sell the house, the records or rubber bands for that matter, and since the estate is not being liquidated, they get nothing, and they are 5% liable for the taxes and expenses. Have not heard back about that yet.

Another reason for a revocable living trust instead of a will.

A trustee could just have sold the house for whatever it brought then included 5% of the NET proceeds in the disbursement to the charity.

House contents taken by family members with the rest donated or hauled to the dump before listing the home.

Which is exactly what I did as trustee when settling my relative's estate just a few years ago.

 

[marko]

Another reason for a revocable living trust instead of a will.

A trustee could just have sold the house for whatever it brought then included 5% of the NET proceeds in the disbursement to the charity.

House contents taken by family members with the rest donated or hauled to the dump before listing the home.

Which is exactly what I did as trustee when settling my relative's estate just a few years ago.

A good point. Our attorney did set us up the same way (via trust) but I don't understand the difference on how a trust beneficiary is different from a will beneficiary. Are you able to elaborate? I don't want to incur a $450 tab for asking.

 

[ncbill]

A good point. Our attorney did set us up the same way (via trust) but I don't understand the difference on how a trust beneficiary is different from a will beneficiary. Are you able to elaborate? I don't want to incur a $450 tab for asking.

For a revocable living trust you'd normally just have a 'pour-over' will where the trust itself is the only named beneficiary of any assets not already titled in the trust's name.

So all assets eventually get distributed via the beneficiary designations in the trust.

There is normally no 'notice to creditors' nor does the trust disclose the beneficiaries publicly, as does a will.

 

[Sunset]

The only first hand advice I can give is this:
Do NOT will a percentage of your estate to a charity. Make it a fixed dollar amount. We have had no end of trouble with a parent to donated 5% of their wealth to a church charity. The estate included the house. The church is challenging the amount the home will be listed for, claiming it's worth more. And you know what? They can put a halt you selling your parent's home even though you are the executor of the estate because, as a beneficiary, they can require proof of all monetary value for every stinking piece of property right down to the rubber bands and paper clips in the junk drawer. And they will. In this case, it's stuff like record/album collection of over 50 years. There's nothing of value, being almost all Christian music albums, but we have to document and prove the value of each of the over 100 albums before they will concur on the estate value. What bulchit that is! Out of frustration, we told them we have decided NOT to sell the house, the records or rubber bands for that matter, and since the estate is not being liquidated, they get nothing, and they are 5% liable for the taxes and expenses. Have not heard back about that yet.

Wow.... talk about a different view of a Church.

How incredibly frustrating..

<my worthless opinion>:
How about just giving them all the junk telling them it's worth $X, and ask them to agree or they can evaluate/suggest a value.
Whichever they choose your $X or they say it's $Y, then tell them to keep it and it will be part of their 5%.

I don't think a Will says you have to sell something to give a percentage of a stamp collection, you can just give the proper portion (or all) as the percentage.

 

[marko]

For a revocable living trust you'd normally just have a 'pour-over' will where the trust itself is the only named beneficiary of any assets not already titled in the trust's name.

So all assets eventually get distributed via the beneficiary designations in the trust.

There is normally no 'notice to creditors' nor does the trust disclose the beneficiaries publicly, as does a will.

Thanks!

 

[Lewis Clark]

... The church is challenging the amount the home will be listed for, claiming it's worth more. And you know what? They can put a halt you selling your parent's home even though you are the executor of the estate because, as a beneficiary, they can require proof of all monetary value for every stinking piece of property right down to the rubber bands and paper clips in the junk drawer. And they will. ...

This is insane.

In my view the only proper response from ANY beneficiary should be "Thank you very much".

 

[Teacher Terry]

That’s a horrible story about that greedy church. I hope you find a legal way to cut them out entirely. They don’t deserve a penny. Ugh!!

 

[dmpi]

I wonder if the Church just hired an overly aggressive lawyer.

 

[CRLLS]

Along the same lines of greedy churches, when MIL passed away, we held a service and had her pastor preside. They offered to print the service program. Unbeknownst by the family, they took the liberty to add their church name to the list of her chosen charities for donations. And they put it at the top. This was not on her list of charities. She had donated thousands each year while she was alive. I think they had enough.

 

[marko]

This is insane.

In my view the only proper response from ANY beneficiary should be "Thank you very much".

I wish. I was executor of my uncle's estate. I had to write a check for $750,000 to a religious charity. You have all heard the name. They cashed the check. In response, we got........nothing. Not a thank you, not a form letter, no acknowledgement of any kind.

The recipients of his $10,000 checks sent me personal letters of thanks and even a personal phone call.