It is important to look at your ultimate objectives—not in terms of dollars, but in terms of what you want to accomplish. Do you want to provide security for your spouse? Financial protection for dependent children? An inheritance for adult children? A gift for certain friends? A donation to express your commitment to one or more meaningful charitable organizations?
Planning tip: Take the time to write down your ultimate estate objectives. At this early stage, forget about dollars. Simply think about your legacy and what you want to accomplish for yourself and your beneficiaries.
Make a list of your assets:
- Securities (stocks, bonds, mutual funds)
- Real estate (including vacation property and investment property)
- Bank accounts (savings, checking, CDs, money market)
- Personal property (art, collections, jewelry, furniture, cars, etc.)
- Life insurance (cash value, term, universal, group, etc.)
- Retirement assets (IRAs, 401(k)s, pension plans, etc.)
- Digital assets (digital currency, online payment services, online banking, etc.)
Planning tip: Be sure to include all your assets, even jointly owned property.
One early decision you will need to make is whether you want to leave property outright in your will or in trust. Certainly, if the beneficiary is a minor, or ill or incapacitated, it makes more sense to place the property in trust. You might also consider a trust when you want to:
- Save the beneficiary from the task of managing property or other assets.
- Ensure that property or income will be available to provide security for the beneficiary’s lifetime.
- Pass property (or income from the property) to one person immediately, then to a charity or another person at a later time.
Planning tip: Your attorney can draft a trust to accomplish your objectives. You name the trustee and define the trustee’s powers and duties. You name the beneficiaries and define their rights, along with what they will receive.
Because estate planning includes coordinating charitable giving with estate and retirement planning, it can be helpful to know about life income gifts. A life income gift to Indiana University can accomplish two important goals at once—supporting IU’s mission and providing a lifetime income for you and/or someone else. There is flexibility in how you plan and structure a life income gift, who receives payments, and when the income period begins.
A charitable gift annuity is the simplest life income gift. It is easy to set up and can provide income to one or two beneficiaries for life.
A charitable remainder trust is another option. It can have more than two income beneficiaries, and while it offers greater planning flexibility than a charitable gift annuity, it usually requires a higher gift commitment and more complex planning.
Contact us for additional information—life income gifts are an appealing way to meet philanthropic goals and provide income for retirement.