E-Devotional- Week 10

CHRISTIAN ESTATE PLANNING- WEEK 2 FINE TUNING YOUR PLAN FOR DISTRIBUTION OF ASSETS AT DEATH
By: Laurie Valentine- COO & Trust Counsel 
Estate planning is an important part of every Christian’s stewardship responsibilities. A Christian estate plan is one that you develop by determining God’s will for (1) how your assets should be distributed at your death and (2) how your affairs would be managed in the event you become incapacitated during your lifetime. This lesson will provide guidance in how you may “fine tune” your testamentary plan.

Scripture References: Proverbs 15:22, 21:5.

Please read these passages in your Bible now.

Can I include gifts of specific things or amounts in my Will?

Yes. Many people want specific things, assets or amounts to go to particular beneficiaries at their death. Specific bequests of designated assets (e.g., “my antique walnut dresser”; “Blackacre, my family’s farm”; “my AT&T stock”) and general bequests of cash gifts allow you to “fine tune” your plan of distribution. Specific and general bequests provide you with an opportunity to make gifts to those charitable causes, including your church, which you have supported during your life.

How do I make provision for my children that will allow them to benefit from my estate, but not give them too much at too young an age?
Most parents want to make sure that if they die before their children reach young adulthood what is left to the children will be well-managed and available for education and other needs. This can be accomplished by including a testamentary trust provision in your Will.

A “testamentary trust” is a provision in your Will that directs that the share you are leaving to the young child is to be distributed to a third person who will serve as the trustee (manager) of that share until the child reaches the age or ages you designate in the trust as the age(s) when you believe the child is ready to have full ownership and control of his/her share of your estate. The trustee can be authorized to use the earnings from the trust assets for the education, health and other needs of the child. You may also permit the trustee to use portions of the principal for those needs. When the child reaches the age(s) you have designated, the testamentary trust (or share of the trust) is distributed, outright and free of trust, to the child.

If you have life insurance or other contractual death benefits over which you have the right to designate beneficiaries, you should name the testamentary trust(s) for your child(ren) as the contingent or primary beneficiary(s) of those death benefits so that you have a coordinated plan of distribution of assets at death.

How can I assure that things will be handled smoothly at my death?
Smooth administration and distribution of your estate can be achieved by naming an executor who is familiar with your family and can handle the various tasks required at your death---determining what you own at death, paying your final debts and probate expenses, managing the assets in your estate, seeing that all required tax returns are filed and distributing your assets as your Will directs. To assure that someone of your choosing handles these important duties, you should name not only a first choice, but also at least one alternate executor in your Will.

What happens if I die without a Will?
If you die without a Will, the Kentucky Intestate Succession statutes (KRS §§ 391.010, 391.030) direct how your individually owned assets will pass at your death

Kentucky’s “plan” for how your assets will be distributed at your death may not meet your family’s needs. All distributions under Kentucky’s plan are outright distributions---no provision is made for management of the shares that will pass to young or incapacitated beneficiaries. Shares designated to pass to beneficiaries under age 18 will be distributed to a guardian selected by the court. At age 18, the young beneficiary gets full ownership and control of his/her share. Kentucky’s plan for asset distribution also does not allow you to include your church or any other charitable cause.

Using Kentucky’s plan for asset distribution may result in higher death taxes and probate expenses, which reduces what will be left for distribution to your heirs. It also results in the court and your heirs deciding who will serve as the executor of your estate.

Prayer Focus: Take time to pray for God’s guidance in how your plan of distribution should be “fine-tuned” to meet the needs of your family and Christian causes you wish to benefit at your death.

Next Week: Incapacity Planning – Part I 

For more information, please call us at (502) 489-3533 or toll free in KY at 1-(866) 489-3533

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.