Estate Frequently Asked Questions


Questions

  1. Aren't charitable bequests made mainly by wealthy people or by those with no close relatives?
  2. How do people usually make such bequests to Lutheran Hour Ministries?
  3. Which estate documents might be important for me to keep track of?
  4. Is it true that most people don't have a will?
  5. Why don't people make wills?
  6. What really happens when people die without valid wills?
  7. What can a will accomplish?
  8. Once I have a will, should I ever have to change it?
  9. Where should my will be kept?
  10. Should I notify a charitable organization that I have included it in my will?
  11. Can I write my own will without hiring an attorney?
  12. What does the personal representative named in my will do?
  13. Can I name my spouse as my personal representative?
  14. How much detail should a will contain regarding the disposition of particular items of property?
  15. Should a trust be created in a will?
  16. I don't own that many assets. Do I still have to worry about the estate tax?
  17. Doesn't joint ownership make a will unnecessary?
  18. If I leave everything to my spouse, do I still have to worry about the estate tax?
  19. What is the "unlimited" marital deduction"?


Answers

1.

Aren't charitable bequests made mainly by wealthy people or by those with no close relatives?

Not necessarily. Many gifts are made by persons who first provide for their loved ones and then choose to leave the remainder of their assets to a charity as a lasting legacy to their most cherished values. The charity may be able to point out special purposes for your bequest that will add greatly to your own sense of personal satisfaction.

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2.

How do people usually make such bequests to Lutheran Hour Ministries?

Your bequest for Lutheran Hour Ministries can take several forms. A simple direction for the payment of a sum of money to LHM is the most common method. You may want to consider whether a bequest of a percentage of your estate is a better expression of your desires than a fixed amount. Bequeathing to LHM the residue of your assets is also a popular form of bequest.

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3.

Which estate documents might be important for me to keep track of?

  • Estate planning information sheet
  • Will
  • Trust
  • Life insurance policy(ies)
  • Company pension plan
  • IRA, 401(k)
  • Prenuptial agreement
  • Guardianship for minor children
  • Trust for children
  • Durable power of attorney
  • Living will
  • Health care representative
  • Instruction letter for family
  • Cemetery plot information

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4.

Is it true that most people don't have a will?

It is estimated that 50 percent of Americans will die without a will, which oftentimes means their wishes to give a charity an estate gift go unfulfilled. Ninety percent of people in the United States say they want to make an estate gift, but sadly only 20 percent actually do.

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5.

Why don't people make wills?

Some feel they don't own enough property to need one, or that life insurance and retirement plan beneficiary designations are sufficient. Some believe that joint ownership makes a will unnecessary. Others think their spouse inherits everything automatically.

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6.

What really happens when people die without valid wills?

Not making a decision concerning the distribution of your estate allows the laws of your state to assume authority. A court decides who should be your administrator or who should be guardian of your surviving minor children. State laws are impersonal and cannot make bequests to charities and friends. They also impose certain fees and other expenses which could have been minimized or eliminated through a well-planned will. Anyone who cares about how their property will be distributed at death should have a will.

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7.

What can a will accomplish?

Your will is a legally binding but completely amendable document that can guarantee that your most important decisions and desires will be honored and the distribution of your property will be given to the people or organizations you choose.

You can also control the influences that will be present in your children's environment after your death by naming specific guardians in your will.

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8.

Once I have a will, should I ever have to change it?

You should review your will periodically. Events which may prompt you to update your will include:

  • Moving to a different state;
  • Appreciation or depreciation in value of stocks, real estate, and other assets;
  • Change in marital status;
  • The addition of children or grandchildren;
  • The loss of a beneficiary through death or estrangement;
  • Changes in tax laws.

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9.

Where should my will be kept?

Keep a copy of your will, along with a letter of instruction for your loved ones, at home for easy periodic review. Keep the original in your safe deposit box, in your attorney's files, or in your bank's trust department. It is important that your will be safe from fire or theft, and that responsible persons know where to find your will after your death.

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10.

Should I notify a charitable organization that I have included it in my will?

Yes. Notifying a charitable beneficiary of your plans helps to ensure that your gift is used according to your wishes, and assists the beneficiary in their long-term financial planning. Be sure to provide them with a copy of the beneficiary designation portion of your will. Also, be sure to obtain and use the correct legal name and address of the charitable organization, and to keep this information up-to-date.

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11.

Can I write my own will without hiring an attorney?

You can, but it is generally not advisable to do so. To ensure that your will is not declared invalid by the courts, there is no substitute for the professional expertise of a competent attorney. To reduce attorney fees, organize your basic information and arrive at decisions prior to meeting. Compile a comprehensive personal affairs record, and be prepared to discuss whom you would like to appoint to settle your estate and/or to be guardian for any minor children. You will need to provide your attorney with a great deal of information to draft a will that successfully accomplishes your unique objectives.

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12.

What does the personal representative named in my will do?

Some of the many important duties your personal representative will complete include:

  • Obtaining the death certificate and providing copies of it to your insurance company, the Social Security office, and others;
  • Notifying banks where you have accounts or safe-deposit boxes;
  • Presenting your will to the probate court and defending it if necessary;
  • Completing and filing state and federal estate tax and income tax returns, as required by law;
  • Disposing of your property according to your instructions;
  • Establishing any trusts created in your will.

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13.

Can I name my spouse as my personal representative?

Ideally, your executor will be not only fully competent to perform the tasks involved in settling your estate, but also sincerely committed to assisting your beneficiaries with any special problems that may arise after your death.

You may nominate your husband or wife as your executor, a competent and experienced friend or relative, or the trust department of a bank. Many name a spouse, friend, or relative together with the trust department of a bank to serve as co-executors.

It is a good idea to make certain that the person you nominate as your executor is capable of meeting and handling the challenges and responsibilities of the office. If you have special or complicated needs, make sure your will clearly gives the executor the appropriate powers he/she will need.

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14.

How much detail should a will contain regarding the disposition of particular items of property?

Enough to prevent misunderstandings, but not in such detail that any sale of property prior to your death would cause confusion. You may choose to divide your property by percentages. Of course, your decision will depend on the assets you are distributing. Many people attach a list of meaningful items that they wish to go to specific people to their will.

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15.

Should a trust be created in a will?

Creating one or more trusts in your will may enable you to reduce or eliminate taxes on both spouses' estates. A trust is simply an arrangement by which all or some of your property will be transferred at your death to a trustee. The trustee assumes the responsibility of managing and administering such property for the benefit of any persons or organizations you name. In this manner, trusts can relieve a surviving spouse of the problems of managing investments or real estate. Special trusts can enable you to make meaningful charitable gifts while providing your survivors with payments for their lifetimes. You and your attorney should work together to tailor every detail of your trust to your personal goals.

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16.

I don't own that many assets. Do I still have to worry about the estate tax?

For estate tax purposes, you may be worth a lot more than you think. In addition to your obvious assets, consider the value of your retirement accounts and life insurance policies. If life insurance is payable to your estate or you own the insurance policy at your death, then the insurance will be included in your estate.

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17.

Doesn't joint ownership make a will unnecessary?

This is a common misconception. Both you and your joint owner need to put your wishes in writing in a will. While it's true that most jointly owned property passes automatically to the surviving joint owner, no one can predict who that surviving owner will be. Joint ownership may also create unnecessary estate taxes and may result in the imposition of gift taxes. It may also deny you complete control over your property while you're still living.

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18.

If I leave everything to my spouse, do I still have to worry about the estate tax?

Yes, because you must also consider the estate tax implications of your surviving spouse.

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19.

What is the "unlimited marital deduction"?

In your will, a husband or wife may leave all property to his or her spouse and pay no federal estate taxes on the estate of the first to die. However, it is a good idea to consult with your advisors about ways your will and other plans can minimize taxes on the estate of the surviving spouse.

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