Planned Giving

So why have 60 percent of U.S. adults not created a will?

Perhaps the whole thing seems too time-consuming, difficult or even mysterious. To overcome these obstacles, review this helpful guide that gives clear answers to the questions you may have.

What Happens If You Don’t Have a Will?
If you die without a will, your estate will be divided according to laws in the state where you live. The resulting transfer of assets may be very different from what you had wished. While certain family members will likely receive part of your estate, close friends or charities that you may have wanted to remember will not be included.

What Can You Put in Your Will?
Only you know the special circumstances of your family members and beneficiaries. That’s why it’s important to discuss these factors with your attorney. Some things to address include how you want to distribute your estate, whom you want to be executor and what charities you wish to support.

For example, you may want your will to:

1. Name the executor of your estate
2. Give your property to those you choose
3. Set up trusts to save on taxes and provide financial management
4. Name a guardian for minor children
5. Ensure lifetime care for a child with a disability
6. Pass what you choose to children of a prior marriage
7. Set guidelines for distributions if you and your spouse die at the same time

Your attorney may suggest other components, but be prepared to talk about these items so you will be in a position to have a document drafted that accomplishes your wishes. We also suggest that you ask your attorney about a living will, health care power of attorney, and a durable power of attorney in case you become incapacitated.

Why Leave Charitable Gifts in Your Will?
Some individuals plan on leaving gifts to their favorite charities, talk about it with the organizations and their friends, and then never get around to properly establishing such gifts in their wills. If you make this mistake, your estate will not realize the benefits of the unlimited charitable estate tax deduction, and the causes you wished to support do not receive your help.

You Can Revoke Your Will
Note that one of the articles in most wills is a “revocation of prior wills and codicils.” Relationships and situations change, and this article ensures that you are free to alter your will with a codicil or to change your will entirely at any time. It is a good idea to keep your old will but to write on its pages (1) that it has been revoked and replaced by a new will, and (2) the date of the new will. This may be useful in situations when someone wants to challenge a newer will.

For more information, please contact Chief Development Officer Peggy Shriver by email at pshriver@riseagainsthunger.org or by phone at (919) 839-0689.  We would be glad to answer any questions you may have about Rise Against Hunger and how to include it in your estate plan.

It will save time and lead you to the options that meet the needs of your beneficiaries, protect your estate and keep your estate taxes as low as possible.

Information You’ll Need

• Names, addresses and birth dates for you, your spouse, your children, your mother and father and your sisters and brothers. Note any adopted children.
• The location of your birth certificate and, if you have one, your veteran’s discharge certificate.
• The state of your legal residence. Be sure to alert your attorney all of the particulars if you have a home in another state.
• The name(s) of your deceased or former spouse(s) and any documents that would help determine if he or she has remaining inheritance rights.
• A copy of any prenuptial or postnuptial agreement.
• Any physical or mental disabilities or marital problems of your beneficiaries, as well as money management concerns.
• A copy of any prior will or trust agreement and its location.
• The location of any gift tax returns.
• Details about your employment benefits: group life insurance, retirement, etc.
• Details on annuities and life insurance policies: owner, beneficiary, policy number, etc.
• A listing of real estate: location, improvements, title, value, mortgages and the location of papers.
• Details about business interests: estimated values, proportions owned by you and by others, and a copy of any buy-sell agreements.
• The nature and value of royalties and/or patents owned by you.
• A copy of any financial or health care power of attorney given by you.
• The nature of any pre made funeral arrangements.
• Records distinguishing community property from non-community property, if applicable

Inventory of Assets and Liabilities
Use the current market value for every major item you own and the face value of any life insurance. Don’t strive for exact amounts; rounded numbers are fine.

Questionnaire: How Do You Want Your Estate Divided?

• After your lifetime, how and to whom do you want your estate distributed?
• If you and your spouse die before your children are old enough to manage large amounts of money, who should be the trustee of their money? Who should be their guardian while they are minors?
• How do you want your investments managed after your lifetime? Should your spouse manage them? If not, from whom should your spouse seek help? Have you thought about trusts?
• Do you want to minimize estate and income taxes? Do you know how a trust can save taxes?
• If you are not survived by a spouse or children, do you want to benefit other relatives?
• Are there charitable organizations you would like to support?

Help From Professionals
If you are considering making a gift to our organization from your estate, please call us at (919) 839-0689 to set up an appointment so we may discuss your philanthropic goals.

First, Select Your Beneficiary Designations
Although many people think of a will as the easiest way to transfer assets after their lifetime, it doesn’t cover everything. In fact, retirement plans, IRAs, life insurance and insurance annuities are not controlled by the terms of your will, but instead use separate beneficiary forms to determine who receives them. These beneficiary designations trump your will when it comes to passing along these assets at your death, making them effective and easy ways to leave a legacy.

The Three Easiest Ways to Leave Your Legacy

Retirement Plans and IRAs
If you want to make a difference at our organization after your lifetime, consider a tax-wise gift from your retirement plan or IRA. Here’s why:

By way of background, usually an inheritance does not trigger taxable income either to your estate or heirs. There are, however, a few instances when a beneficiary must pay income tax on an inherited asset. Typically, a retirement plan or IRA will be the largest source of assets that generate taxable income when paid to the beneficiary. Therefore, if you are considering a gift to charity after your lifetime, it is usually better to leave nontaxable assets (such as stocks and real estate) to your loved ones and the taxable assets (retirement accounts and IRAs) to tax-exempt charitable organizations, such as ours.

To complete your gift, simply contact your retirement plan or IRA administrator and complete a beneficiary designation form naming our organization as beneficiary and the percentage you’d like us to receive (1-100). Then mail it back to the plan administrator and keep a copy for your records. Beneficiary forms are filled out on your terms and can be changed at any time without the formality associated with executing a will.

Example: Dan would like to leave our organization his $100,000 IRA after his death. If he names us as the beneficiary for 100 percent of his IRA, we would receive the entire $100,000 to help fulfill our mission. By comparison, if Dan leaves the IRA to his sister, she will owe a sizable amount of the IRA to income taxes.

Life Insurance Policies
Maybe you once needed life insurance for your loved ones, but now your family’s requirements have changed. Why not use the insurance policy to help advance our mission? Not only will you make a substantial gift at a relatively low cost, but it is revocable at any time should you need to change your plans. You can designate our organization as the beneficiary for a percentage of your life insurance policy’s death benefit. You choose whatever percent you desire. To complete your future gift, contact your insurance company or agent and request and complete a beneficiary designation form. Then mail it back to the insurance company. Keep a copy for your records.

Insurance Annuities
Insurance annuities are tax-heavy assets to own, similar to retirement plans and IRAs. They carry an income tax burden when paid to your named beneficiary. The income tax is due on the growth of the annuity—in other words, what its value is worth when you die over what you paid for it. The tax burden makes these assets another popular choice to leave to a tax-exempt organization like ours.

Similar to the process for making gifts of retirement plan assets and life insurance, to complete a gift from your insurance annuity, contact your insurance company or its agent for a change-of-beneficiary form for the annuity. Decide what percentage of the annuity’s value you would like us to receive and name us along with the stated percentage on the beneficiary form. Then mail it back to the insurance company and keep a copy for your records.

The Importance of Updating Your Designations
Beneficiary designations can be modified at any time to meet your changing needs. Your assets may never reach your intended recipients if you’ve failed to keep the beneficiary designations up to date. Experts suggest reviewing them every two to three years when you review your entire estate plan. If you are considering a gift to our organization, we would be happy to work with you and your professional advisors to determine how your future gift through a beneficiary designation could impact our mission. Contact Chief Development Officer Peggy Shriver today for more information.

Once you have completed this guide, give a copy to your executor and attorney, keep the original with your other important papers, and update it at least every two to three years. If you are married, have your spouse complete his or her own separate guide.

An Organizer for Essential Estate Planning Information

Your legal name:
Legal name of spouse:
Address:
City/State/ZIP:
Social Security number:
Today’s date:

Will/Living Trust
Do you have either one? Yes/No
Location of original document(s):
Date(s) created:
Name of lawyer who prepared the document(s):
Address:
City/State/ZIP:

Power of Attorney
With a power of attorney, you allow someone to act on your behalf in the event that you are unable to do so yourself. For example, you could be on an extended vacation or affected by a temporary medical condition. The power of attorney allows the holder of the power to transact business, including buying, selling and gathering assets; discharging debts; and handling real estate.

Do you have one? Yes/No
Location of original document:
Name of person given the power to act:
Address:

Health Care Power of Attorney/Living Will
A health care power of attorney allows you to appoint someone to make medical decisions on your behalf should you become unable to do so. It may also encompass or be accompanied by a living will, directing whether life-sustaining procedures shall be used to prolong life when it’s medically determined that no hope of recovery remains.

Do you have either one? Yes/No
Location of original document(s):
Name of primary care physician:
Address:
City/State/ZIP:

Property Deeds

Do you own any real property? Yes/No
Location of deed(s):
Addresses of real estate you own:

Military Service

Have you served in the military? Yes/No
Location of discharge documents:

Bank Account, Certificates of Deposit, Stocks, Bonds, Mutual Funds and Money Market Accounts

Do you have any of these accounts? Yes/No
Names of financial institutions/account numbers:

Life Insurance

Do you have any life insurance policies insuring your life, or do you own any policies on someone else’s life? Yes/No
Insurance companies/policy numbers:

Annuities

Do you have any annuities? Yes/No
Companies/policy numbers:

Retirement Accounts and IRAs

Do you have any retirement accounts or IRAs? Yes/No
Account types/account numbers/custodians of the funds:

Safe-Deposit Box and the Key’s Location

Do you have one? Yes/No
Bank location (specific branch)/box number/location of key:

Passwords

Passwords for your computer login screen, e-mail accounts and other password-protected accounts:

To create your estate plan, you will need to work with an attorney who specializes in wills, trusts or estate planning. Follow this outline to prepare for your initial meeting.

Inventory of Assets and Liabilities

Assets

• Money in savings and checking accounts—list banks and account numbers.
• Stocks and bonds, mutual funds, money market funds, and CDs—list firms and account numbers.
• Real estate (including vacation property), automobiles, jewelry, artwork and other valuables.
• Life insurance policies on your life—list face amounts, cash values, beneficiaries, name of insurance company and agent.
• IRA and other retirement plan assets—list custodians, account numbers and beneficiaries.
• Interest in a business, partnership interests and money owed to you.
• Interest in a trust that was set up by someone else.
• Include the names and addresses of any co-owners of assets on your list.

Debts and Obligations

For each of the following items, identify to whom the debt is owed; name, address and number of the account; amount of debt outstanding; and the repayment schedule.

• Home mortgages
• Car loans
• Credit card balances
• Any other debt

Identify Your Beneficiaries
Make a list of all of your close family members and friends whom you want to remember in your plans. List any charitable organizations you want to benefit after your lifetime—perhaps your place of worship, hospital, school or a service agency. A gift to these organizations through your estate can make a lasting difference.

Name an Executor
This person (or entity) will:

• be the manager of your estate.
• file your will for probate (the legal process of verifying your will).
• collect and manage your assets.
• pay your bills, funeral expenses, and any estate or inheritance taxes due.
• distribute your assets to the heirs that you have designated.

Your executor should be someone you trust—someone who can handle business matters and someone who also will be sensitive to the needs and desires of you and your family.

Five Important Documents
When you meet with your attorney, ask about the following documents.

• Will. Your will is a written document that directs your assets to the people and causes you care about, executed in accordance with the formalities required by state law.
• Living trust. A revocable living trust can hold a majority of your assets during your lifetime, and it directs where the trust assets go later. This document can become the instrument by which your assets are distributed at your death, in essence acting like a will. Plus, assets in a living trust bypass the probate process.
• Durable power of attorney. This document authorizes another person to make decisions for you—usually in financial matters—when you are unable to make those decisions for yourself. A durable power of attorney remains effective if you should become ill or incapacitated, but it ends at death.
• Living will. A living will is a legal document that expresses your wishes about prolonging your life by artificial or extraordinary measures in the event of a serious illness. Although your attorney will draft your living will, you should discuss its provisions with your doctor to make sure he or she feels comfortable about carrying out its directions.
• Health care proxy. A health care proxy is a written document that names the person you want to make medical decisions for you in the event you are unable to make them for yourself. In essence, a health care proxy is a power of attorney for making health care decisions.

If you are considering a gift to our organization, we would be delighted to work with you and your advisers to explore the many options.

1. Cash. This is a simple and common way to make a gift. Donations of cash are deductible if you itemize in the year of contribution.
2. Bequests. Leave us a percentage of your estate. Or, make a bequest of money or a particular piece of property to our organization.
3. Securities. Give stocks that have increased greatly in value, particularly those producing a low yield. If you have owned them longer than one year, you will pay no capital gains tax on the transaction, and you can deduct the full fair market value.
4. Bank accounts and CDs. Name us as the “payable-on-death beneficiary” of your bank accounts or on certificates of deposit. You own the assets for your lifetime and have them available for your use. Upon your death, the assets pass directly to us without going through probate.
5. Retirement plan assets. Your most efficient estate planning option may be leaving all or a portion of your retirement plan to charity, because tax laws often subject these assets to income and estate taxes upon death. Many techniques can be used to avoid income taxes up to 39.6 percent. At the same time, you can pass more tax-favored assets to your family.
6. Charitable gift annuity. This is a simple contract between you and us that pays you a fixed dollar amount for your lifetime. The older you are, the higher your annuity rate. If you use appreciated property to fund the gift annuity, you will escape the capital gains tax on the gift portion of the transaction. Plus, you are able to spread the remaining capital gains tax over your estimated life expectancy. You also receive a partial income tax deduction.
7. Charitable remainder trust. A charitable remainder trust pays a fixed or variable income to the donor. The payments are made either for life or a period of time not to exceed 20 years. At the end of the trust’s term, the balance in the trust supports our mission. You’ll also receive a partial income tax deduction.
8. Charitable lead trust. This type of charitable trust pays income to one or more charitable organizations, typically for a period of years, after which the remaining trust assets pass to family members.
9. Real estate. This is a simple donation if you own property that is not mortgaged, has appreciated in value, and you no longer need or use. You can deduct the fair market value of your gift and eliminate all capital gains taxes. Plus, you have removed that asset from your taxable estate.
10. Retained life estate. You can transfer the deed of your personal residence or farm to us now and keep the right to live in and use the property for your lifetime. You will receive a current charitable deduction in an amount that is based on your life expectancy and the value of the property.
11. Bargain sale. In this scenario, you agree to sell property to a charity at less than its fair market value. The difference between the sale price and the fair market value is your charitable deduction. The net result is often more favorable than selling the property at fair market value and making a charitable contribution from the capital gain.
12. Life insurance. Rather than cancel policies you no longer need, you could name us as the beneficiary, or simply donate the policies outright.