Planned Giving Officer Keith Johnson discusses the importance of estate planning, and how to use your will as a charitable giving tool.
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Hi, my name is Keith Johnson, Planned Giving Officer at Cairn University and the Executive Director of The Regency Foundation. Welcome to the continuation of our wealth planning podcast series. Throughout this series we hope to provide practical ideas on how to establish Godly wealth management habits that can be applied to your life.
We have been focusing on how to properly manage through 13 wealth management issues that most of us will face in our lifetime. Most of the financial issues we face can result in significant tax consequences.
One of those important wealth management issues I want to discuss today has to do with estate planning. Most of us work very hard all our lives and slowly build assets that might include our home and other real estate, financial assets such as savings and investments, retirement accounts and of course, our personal effects. Estate planning has to do with the distribution of these assets at your death.
In recent years, people have heard in the news that Congress has greatly reduced or eliminated death taxes, known as the estate tax, for most people, unless you have built up substantial wealth. As a result, some people have concluded that estate planning is no longer necessary because the size of their estate is far below the federal estate tax exclusion amount.
It is important to understand that creating a well thought out estate plan goes far beyond just tax considerations. I want to encourage everyone to take the time to prepare a Will and other estate planning document. If you do not, every state has a plan already established by law that will dictate where your assets will go upon your death; and often, the State’s plan is very different than your plan.
For our purposes today, I am going to use the State of Pennsylvania as our example, but you should check the laws of your state to be sure you understand what happens if you die without a will.
Before I share Pennsylvania’s plan, let me make an important comment for those who are newly married or newer parents. You should immediately take steps to have a Will prepared for the protection and benefit of your spouse and children. If God has entrusted children into your care, you should carefully consider who will take care of them if you and your spouse were to both die. Although it is rare, it does happen. Your Will needs to clearly indicate who is to care for your children in the event death did occur to both of you. Obviously, this is one of the most important decisions you can make.
You need to ask: ‘is it your parents? Is it your spouse’s parents? Is it your brother or sister?” Determining who will care for them can have a lifelong and even an eternal impact on the lives of your children.
In addition, if you have assets, including life insurance, you should ask yourself, “Who is going to take care of the money that is set aside to care for our children?” Is it the same person who has the custody of the children? Thinking through these issues is very important.
As you can see, creating a Will is a very important step. Another reason you should create a Will is to ensure that your assets go exactly where you want them to go.
Let me go back to where we started the podcast today, by answering the question, what happens in PA if you die without a Will?
If you die with:
- Children but no spouse = Children inherit everything
- Spouse but no children or parents = Spouse inherits everything
- Spouse and children = Spouse receives $30,000 plus ½ of remainder; Children receive ½ of remainder
- Spouse and parents = Spouse receives $30,000 plus ½ of remainder; Parents receive ½ of remainder
- Parents but no spouse or children = Parents receive everything
- Siblings but no parent or spouse = Siblings receive everything
It becomes more complicated if you have been remarried and have children by someone other than your current spouse. There are also special rules under law for adopted children, stepchildren not adopted, and foster children.
Don’t make the assumption that you do not need a Will.
There is still another important purpose for creating a Will. It can be used to establish a legacy that honors our Lord as well as your family.
Over the years, many of our alumni and friends have decided to support Cairn University through a Bequest. A Bequest is simply an act of giving personal property or financial assets through your Will to another person or charitable organizations, including Cairn University. Gifts of property can include such things as real estate, vehicles and art. Financial assets might include stocks, bonds, mutual funds or even proceeds from your retirement plan.
Some donors have indicated in their Will that they want to give a certain dollar amount out of their estate to the University. Others indicate they want a certain percentage of their estate to go to Cairn.
Regardless, if it is a dollar amount or a percentage amount, giving through a Bequest is a terrific way to provide a testimony of your faith to your family, friends and even the professionals who assist in the preparation and distribution of your estate. Many believers include a statement in their Will indicating that because God has been faithful to them in life, they want to show their gratitude in death by giving gifts to the organizations that honor the Lord and have been so important to them over the years.
Because I serve as the Planned Giving Officer of Cairn University, I have the privilege of seeing Bequests come in to the University quite often. It is always such an encouragement to our faculty and staff when these gifts come in, because many times, they are totally unexpected. It amazes me how generous our alumni and friends of the university really are. Many times, we are privileged to learn the life stories of those who give in this way and find their generosity in death to be such a wonderful testimony.
As you can see, preparing a Will is very important. You want to be sure your assets are going to go exactly where you want them. As a benefit to our alumni living in PA and NJ, we have an Attorney who has agreed to prepare Wills at a 20% discount. If you would like to learn more about this offer, please reach out to me.
Before I close, let me remind you that if you name Cairn University in your Will as a beneficiary to receive any amount, you are automatically qualified to become a member of our Pathway Society. The Pathway Society has been created to honor those who have created a Planned Gift for the University that will come sometime in the future. I would be happy to send you a brochure explaining the Pathway Society. It will also include a form to complete that will enroll you as a member.
At Cairn University and The Regency Foundation we want to be a valuable resource of information and ideas that you can use in a practical way. To that end, we are offering one hour of financial planning consultation at no charge to you. If would like to take advantage of this benefit or if you have any questions about today’s topic, feel free to contact me by email at email@example.com.
Thank you for your generosity and I look forward to sharing next month’s Advancement podcast.