Creating Your Legacy of Caring

Like so many things in life, results matter……and good results don’t happen by accident!  No one really cares what you would have liked to do. It’s what you have done that counts.
The old saying “The Proof is in the (eating of the) Pudding” is certainly applicable when it comes to creating a legacy with what you have accumulated during your lifetime.  You say you care, prove it!  You say you have been blessed, show it!

Making Lists
Whom do you wish to benefit and what are the determining factors?
1)  Close family members, including spouse, children and possibly grandchildren. Depending upon the size of the estate, this question sometimes arises:  Should the surviving spouse receive everything they have accumulated during their marriage?  Or can the first-to-die spouse make some bequests already to family members and charitable interests?

These are issues that need to be discussed beforehand so that there are no disruptive surprises.  Since no two people are alike, it is unrealistic to expect that there would be complete agreement in this matter – but it should be discussed beforehand.

Example dec 12, 2014 – how much where can i without prescription? jan 6, 2014 – can i over the counter in spain buying baclofen online  :  Jim and Mary have been married over 50 years. They have 4 children, 6 grandchildren and 1 great-grandchild.  They have a modest estate and do not expect to outlive their financial resources. Jim has a $50,000 life insurance policy with his estate as the beneficiary. Jim leaves instructions in his Will that his executor is to set aside $8,000 for funeral expenses and the remaining $42,000 for the grandchildren, distributed equally but not necessarily at one time.

They are to request their share from their grandmother and tell her how they plan to use their last gift from their grandfather.  Suggested uses are:  a monthly allowance for college expenses, first car, long-awaited vacation, trip to Disney Land.  In other words, something they can identify as their legacy from grandpa.

Only a small portion of the overall portion of the estate is used. It can be expected that Mary will be the survivor of the two and her estate will be divided equally between the four children.  But now Jim can enjoy the thought of giving away some of that which the two of them labored together to earn.

2)  Charitable Interests  This also is an area where there might not be complete agreement between husband and wife.  It almost might seem that charitable split-interests gifting arrangements were invented by Congress for just such situations like this: giving the fruit of the gift to the surviving spouse and the tree to the charity.  Gift Annuities and Charitable Remainder Trusts can do this very nicely.

Example:  Jim really appreciated the college education he received.  He felt deeply that it had more than adequately prepared him to achieve the success he enjoyed during his working years and now his retirement years.  He contributed to the annual appeal and felt he wanted to do something more significant in his estate plan.

Since Jim and Mary really didn’t need their RMD (Required Minimum Distribution) from their IRA accounts for everyday expenses, they began to use a portion of them to fund two-lives charitable gift annuities with their college endowment fund as the final beneficiary.  Jim’s goal was to create enough annuities so that the residuum (the amount remaining after the last annuity payment has been made) would fund a cash flow that would match his annual gifts. At his passing Mary would continue to receive the quarterly annuity payments. They could also have achieved similar results with a one-time transfer of stock from their retirement savings to fund a Charitable Remainder Trust, and named several of their favorite charities.

3)  Close friends:  Mourning the loss of a dear friend is always painful but not always recognized. This is an area where the remembrance need not be costly but where the thought really does count. Inventiveness and imagination can go a long way here and really mean a lot.

Example:  Jim and four of his college mates with their wives have been attending their annual class reunions.  In his Will, Jim instructs his executor to put $2,000 into an envelope.  His widow will invite the other four couples to a dinner on the night before their reunion for a Celebration of Life-long Friendships.”  The first $1,000 will be used to cover the tab for the dinner.  What remains of that $1,000 plus the second $1,000 will be used to challenge his classmates to support the college’s scholarship fund. Two thoughtful acts of remembering life-time interests with one thoughtful gesture.

Another List
Not everyone can immediately think what the several options are that they can use to carry out their thoughtful planning. Of course, the first thing that comes to mind is…..
The Will.  Everyone has heard and read repeatedly that having a Will is the basis and perhaps the first step for an estate plan.  To not have a Will is to inflict a costly financial penalty on their beneficiaries and heirs.  Dying “intestate” (without a Will) should never be an option for a thoughtful person.

A Revocable Living Trust.  Many people are hesitant to even consider creating a living trust for their estate plan because of the up-front costs and because they do not comprehend the final expense of going through the probate process. They do so at great risk to their legacy and how they want to be remembered by their beneficiaries.

Invest in yourself and your legacy of caring by buying at least one book on estate planning and follow the advice it gives you.  This investment will pay off for your heirs many, many times over.  It will be one of the best investments you will ever make.

Irrevocable Trusts.  Whereas a Will and a Living Trust are stand-alone documents which accomplish a great deal, the Irrevocable Trusts are sub-trusts to the revocable Trust and Will.

Examples are the Charitable Remainder Unitrust (CRUT) and the Charitable Remainder Annuity Trust (CRAT) and the Charitable Lead Trust (CLT).  Call the Janaka Foundation office for an explanation of these trusts and to see if one is suitable for your situation.

Life Insurance.  If you are reading this, it means that you didn’t use the life insurance policy for the purpose for which you purchased it: financial protection for your family and loved ones. Now it can be used to create your legacy by designating loved ones and lifetime interests as final beneficiaries, including your favorite charities.  Make one or more a “primary beneficiary of a partial interest” of your no-longer-needed life insurance policy.

Now is the time to do something meaningful for those significant others that have made your life meaningful. Now is the time to put the finishing touches to your legacy of caring.