you could give your estate away twice – to your children and to your church?
Can you really give your estate away twice? Could your children receive their full inheritance and then your church or other favorite ministry receive a bequest as well? It almost sounds too good to be true. However, it’s a great option that many don’t know about and, what’s more, it’s a simple solution.
To accomplish this, you designate in your will to place your assets (all of your estate or a portion) in a charitable trust to benefit your children. You determine an amount to be distributed to your children annually (a percentage, such as 5%, or the net income from the trust). You designate that the annual amount be paid to your children until that amount equals the amount that was originally placed in the trust. After the full amount is paid to your children, the remainder is given to your church or other ministry (or a combination of ministries) that you choose.
Here’s a simple example:
Mr. and Mrs. Baptist designated in their wills that, after they pass away, their assets will be placed in a charitable remainder unitrust for the benefit of their two children and then the ministries they choose.
They want 5% of the value of the trust to be paid to their children each year.
After both Mr. and Mrs. Baptist pass away, $300,000 from their estate is placed in the trust.
The trust is managed and invested by the Baptist Foundation.
Each year, their two children receive 5% of the fair market value of the trust as of January 1. They can receive this income monthly, quarterly, semi-annually, or annually.
With an initial value of $300,000, the trust distribution will be $15,000 ($7500 for each child) the first year.
The annual payment will be based on the value in the account at the beginning of each year, but with an average of $300,000 remaining in the trust, the trust will pay their children an amount of around $7500 each for approximately 20 years! (The trust payments will continue until a total of $300,000 is paid.)
Then, the remainder (which should still be around $300,000 or more) will be endowed or given outright for the ministries that Mr. and Mrs. Baptist designated!
Giving your estate to your children in this way has several advantages:
- If you have children that are not good money managers, this is a great way to provide steady income over a long term instead of giving them a large amount at one time.
- Through the income checks they receive, your children will continue to receive reminders of your provision for them.
- Your children will be reminded of your legacy of faith through your ultimate provision for the Lord’s work.
Your favorite ministry or ministries will receive needed resources.
Christian estate planning is all about providing for your family and providing resources for the Lord’s work. The Foundation staff would love to help you get started with a new estate plan or with revising your plan. It’s really simple.
Call the Foundation office (800-723-7242 ext. 8000) OR go to our online Estate Plan Organizer (EPO), a guided, self-paced estate planning tool that allows you to seriously think about your desires and wishes in a safe, secure manner from the comfort of your own home!