I have a will. Do I need anything else?

In addition to a will, most experts recommend that you assign someone you trust “durable power of attorney,” which allows that individual to act on your behalf should you become incapacitated. A living will is also a helpful tool, because it allows you to control decisions about your medical care even if are unable to communicate. Living wills explain if you do or do not want extraordinary medical treatment or artificial nutrition or hydration used to keep you alive if there is no reasonable hope of recovery. A living will may also give your doctor permission to withhold or withdraw life support systems under certain conditions.

Can bequests be handled in a living trust?

Certainly. You may wish to consider a living trust as an estate planning tool. Living trusts may be either revocable or irrevocable and there are advantages and disadvantages to consider in both.
More information on living trusts

What happens to my personal possessions?

Personal possessions are best distributed through a written personal property memo in which you list the personal items you wish to give to specific people. Your will must mention the existence of this memo and you should keep a copy of it with your will.

If a trust agreement is established as irrevocable, it means that it can't be revoked (broken) except under unusual circumstances. Why would anyone want an irrevocable trust?

Individual circumstances vary so there are many different reasons why someone may wish to establish an irrevocable trust. Perhaps an individual wants to ensure that management of a successful family business continues to run smoothly despite his or her death. Or the trust may be a useful way to avoid estate and/or income tax.

What is the difference between a charitable remainder unitrust and a charitable remainder annuity trust?

The major difference is how the income is calculated.

An annuity trust is calculated at the time the trust is established. It is a fixed amount of dollars based on the then market value of the trust. If the assets of the trust go up or down in value, the income portion you receive does not change.

In a unitrust, the assets of the trust are revalued annually and a percentage rate established in the trust agreement determines the dollar amount of the unitrust interest that is paid to you. If the value of the principal in the unitrust declined, the portion of money paid to you would decline as well. Likewise, your income from the trust would increase if the value of the trust assets also increased.

What happens to my assets in a trust for a charity if the charity goes out of business before the expiration of the trust?

Your trustee is authorized to name a substitute, if that is the sole charity.

Should I name a charity as trustee of my charitable remainder trust?

This is often done if the organization is qualified to do so under local law. The organization's representatives can satisfy you in that regard. Often they will serve without fee, which is an additional incentive.

How often should I update my will or trust?

These documents should be updated any time your financial or your family circumstances change. As laws vary from state to state, if you move you should have an attorney licensed in and familiar with the new state's laws review your will or trust agreement. It is always wise, even if there are not any significant changes in your circumstances, to periodically review these important documents. A good rule of thumb is to review your will every three years.

Can I use my insurance to benefit charitable organizations?

Yes. Life insurance can be a convenient way to make a substantial gift to your Sutter Health affiliate.
There are several ways you can use life insurance as the basis for a charitable gift
Gifts of insurance

How can I fund a charitable gift annuity and how is my income calculated?

Typically cash and marketable securities are sources for a charitable gift annuity. Real estate and other marketable assets may also be used, but in many cases acceptance of these kinds of assets are often on a case-by-case basis. Generally, the charity will convert the assets to cash to fund the annuity.
There also may be tax benefits associated with the gift of appreciated securities (the current market value exceeds the cost or basis value). Because a gift annuity is considered partially a gift and partially an annuity, part of the gift avoids capital gain tax entirely. For the portion that is not a gift, capital gains tax is paid over the life expectancy of the annuitant.

The income provided to you by the annuity is determined by your age and the age of an additional beneficiary, if any. It is calculated using tables established and filed with regulatory agencies under which the charity operates its annuity program.

Can I set up a charitable gift annuity and delay the start of the income until I will more likely need it, such as at my retirement, when my income is lower?

Yes, the flexibility associated with establishing charitable gift annuities makes them a popular and effective retirement planning method.

A deferred gift annuity enables you to make a gift now and take a charitable income tax deduction while potentially in a higher tax bracket. Income may be deferred, for instance, until after retirement, when your rate of tax will presumably be lower. A deferred gift annuity is also a creative way to delay income to pay for your children's or grandchildren's college expenses, supplement your retirement income, or help with assisted-care living arrangements that may be inevitable.

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Please note, individual financial circumstances will vary. The information on this site does not constitute legal or tax advice. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. Use of this site signifies your agreement with the terms of use. The content in this Planned Giving section has been developed for Sutter Health by Future Focus. Please report any problems to the Webmaster Revised: June 23, 2006 11:53