By Bruce Bickel, J.D., Estate-Planning Attorney, Fresno, Calif., Chair of the Westmont Parents Council
We’ve heard that kids say the darndest things. So do clients.
My estate planning practice includes many clients who wish to leave a monetary gift to Christian ministries at their deaths. Frequently this intention must be balanced with the client’s desire to benefit their adult children and other family members. My clients, Dave and Joyce, were considering these issues. As I discussed a technique to accomplish their desires, Joyce responded with a 10-word sentence that accurately and succinctly summarized an explanation that had taken me 45 minutes and most of my legal pad to present.
The size of Dave and Joyce’s estate fell below the level that triggers death taxes, so they were not motivated to make a charitable gift for tax reasons. They simply wanted to make a significant gift to the Lord’s work out of a sense of stewardship. That donation needed to be balanced with their desire to pass a significant portion of their estate to their three adult grandchildren over a period of years. I explained one possible approach with the following numbers:
We considered the possibility of holding $500,000 from their estate in a trust after their deaths. We assumed an investment rate of 8 percent, which would produce annual income of $40,000 per year. I explained how the money could be distributed among the three grandchildren for a period of years, with the $500,000 principal to be distributed to the Christian ministry at the end of the trust term.
Dave quickly calculated that the income distribution for 12 ½ years would give the grandchildren a total of $500,000, with the original trust principal of $500,000 still available for the ministry. By the end of 12 ½ years, the grandchildren and the ministry would both receive $500,000. With clarity of thought and brevity of speech that her attorney lacked, Joyce exclaimed, “Oh, this is how I can give my estate twice.”
As an attorney, I tried to salvage some personal credit for my client’s own insightful analysis, so I replied, “Uuuh, I am glad I was able to explain this in a manner that allowed you to reach such a profound conclusion.”
The concept of “giving your estate twice” appeals to many clients who want to achieve the concurrent goals of benefiting their family and the Lord’s work. Of course, there are issues (such as the “time value of money”) that belie the pure simplicity of Joyce’s statement. Nonetheless, in a generic sense, the thought of “giving your estate twice” seems to match the heartfelt desires of those who love the Lord and are able to financially assist a ministry for the sake of His kingdom.
I have added Joyce’s statement to my estate planning lexicon, and I use it often in my client conferences. This is the first time I have ascribed credit to her for the “give your estate twice” phrase, but I have no intention of paying royalties to her.
If you would like to talk to someone at Westmont about “How To Give Your Estate Twice,” contact Iva Schatz, director of planned giving at 1-800-998-5652 and press “1.”