A Wealthy Retired Couple Plan Their Estate
The total value of Everett & Charlotte’s home, investments, and retirement accounts is over $5,000,000. While they focused on saving and investing, they have not focused on transferring their assets to their heirs and the organizations they support. Their current Wills are over 10 years old and simply leave everything to each other and then to their kids. They realized that everything they owned belongs to God – they were simply stewards of those assets. They wanted to create a plan which left a nice inheritance to their children: enough to supplement their lifestyles, but not so much as to diminish their initiative. They also wanted to make sure they remembered their ministries with their planning. They didn’t like the idea of paying any more tax than they have already paid through the years.
Everett and Charlotte considered what type of inheritance would be best for each of their heirs. They also considered which organizations they would like to benefit from their assets after they are gone. They decided to create a Will which left a generous gift to each of their two children, $1,000,000 to each. Anything in their estate above that amount will be split: 75% will be left to the foundation at their church and 25% will be left to the local hospital. The assets going to the foundation at their church will be designated to foreign ministry and local benevolence, the two areas the Welches have been very involved during their lives. As an added bonus for Everett and Charlotte, their estate will not lose anything to taxes.
Retired Couple with Modest Assets
Frank and Patsy Team live on a fixed income from Frank’s pension and social security. They own their home, have a modest savings account, and own several CD’s which also provide a little extra income. Frank and Patsy never considered themselves wealthy, so they never thought seriously about needing a Will. However, they realized that they want to have a say in how those assets will pass after they are gone. Without a Will, the distribution of their home, savings account, and CD’s would be controlled by the laws of their state, and other organizations they support will not benefit from their assets.
The Teams would like to leave a nice inheritance to their three children, but they admit their kids are much better off financially than they ever were. They decided to leave half of their assets to their children and half to other organizations.
Frank and Patsy executed Wills which leave half of their assets to their three children equally. Their Wills leave the other half of their assets to a local foundation. They also signed a Donor Advised Fund agreement at the foundation to designate any money the foundation received from the Teams to directly support inner-city work, a cause Frank and Patsy dedicate many hours to each week. Frank and Patsy also executed health care documents and a power of attorney.
Now they can be assured that even though their assets are modest in amount, they will be directed to family and organziations that they love.
Couple Looking Forward to Retirement
Joe and Cora Ballard are in their 60’s with three adult children. They are looking forward to retiring in about three years. Joe and Cora live a relatively modest lifestyle, choosing instead to save as much as possible in their retirement accounts. Recently, in the process of refinancing their house, they completed a financial statement. To their surprise, over half of their net worth was in their retirement accounts.
The Ballard’s do not have any health problems, so they have not thought they really needed a Will. Not that they feel invincible, they just have not thought seriously about dying. But earlier in the year, Joe’s mother died, and they started feeling guilty about not planning better for their children and grandchildren. They want to make sure that their children have as little trouble as possible when they do eventually pass away.
While the Ballard’s want to provide for their children, they also want to provide for others. They have always given away at least ten percent of whatever they earned to their church and to other nonprofit organizations. They decided they wanted to also give part of their assets.
Joe and Cora had Wills drafted which leave everything to each other first, and then, at the death of the second spouse, to their children equally. Since their retirement accounts can pass tax-free to nonprofit organizations, including churches, the Ballard’s will use these accounts to make their gifts. On the beneficiary designation form on each account, they make sure their spouse is the primary beneficiary. The contingent, or secondary, beneficiary is divided into fifths: one-fifth to each child, one-fifth to their church, and one-fifth to the university where they both graduated.
Young Couple with 2 Children & Insurance
Jake and Emily Colvett recently celebrated their ten-year anniversary with the birth of their second child. Life in the Colvett household is now very busy with two children under 3 years of age. Until the birth of their second, Jake and Emily have been focused on their career. Now, having young children depend on them and their support has forced them to plan for the future.
Jake and Emily want to make sure that their children will be placed in a loving and supportive home if something tragically happens to them while the kids are young. Not wanting to cause a financial burden on the new household, the Colvett’s want to make sure they provide assets to help raise the children. While they give to their church and a few local nonprofits, they want to first make sure their two children are taken care of before they would consider leaving something elsewhere.
Jake and Emily executed Wills which leave everything to the surviving spouse. At the death of the second spouse, a trust is created for the benefit of their daughter and son. The trust assets could be used for the childrens’ health, education, and living expenses. At age 25, each child will receive one-third of the assets in their trust. At age 30, they will receive another one-third, and they will receive the rest at age 35. The Colvett’s like the staggered distribution pattern to allow the children time to mature and learn. They also like having a trusted person serve as the childrens’ trustee, a sort of financial advisor, to help them grow and learn.
In addition to their Wills, they named who would be the guardians of their children if the need ever arises. They also executed health care documents and a power of attorney.
To make sure the family could survive financially if one spouse should pass away, both Jake and Emily purchased a life insurance policy. They worked with a life insurance professional to choose a policy with adequate coverage. Because of the amount of coverage they decided to purchase, the Colvett’s realized they could provide substantially for their kids and still leave some to their church and the nonprofit organizations they support. So, on the beneficiary designation form of the life insurance policies, the primary beneficiary of each policy is the surviving spouse. The contingent, or secondary, beneficiaries were their church for a specific amount, the nonprofit organizations for a specific amount, and the remainder to the trust created in their Wills for their children.