Charity
Q. I have quite a bit of valuable jewelry. I’ve spoken with my heirs and have left the pieces they requested in my will. I’d like to donate the rest to a favorite organization, but do charitable groups accept this kind of gift?
A. Yes. Charitable organizations, non-profit schools and colleges and other exempt organizations are glad to accept such gifts. Your estate will receive an estate tax exemption for the value of the gift given through your will. In addition, you can get an income tax charitable deduction for the fair market value of the jewelry if you give it to charity before your death.
Also, depending on the value of the jewelry, you may be able to establish a charitable remainder trust or gift annuity using the jewelry as the funding asset. These plans not only give you a substantial tax deduction, they also can pay you an income for life, with the remainder of the trust value going to charity after your death. It's well worth your time to investigate this option. The Emeritus College Planned Gifts Advisor can help you with information about these plans.
Q: Every time I mention to my son that I want to leave some assets to charity in my will, he balks. How can I convince him that I know what I'm doing?
A: This is a fairly common problem, and there is no single answer to how to handle it. However, there are a number of things that may help. Charities or organizations like Emeritus often can offer tax savings and other cost-saving benefits to both the donor and his/her heirs. If this is the case, you can explain that your charitable act will not result in diminishing his inheritance but actually increasing the amount available to him. If possible, put him in touch with representatives of the organization who will be able to show him the advantage in black and white.
Often, it also helps to familiarize your heirs with the organization to which you're giving. Explain to your son how important that group is to you-how much it has helped you, and the place it holds in your heart. If possible, have your son meet with organization leaders so he can see first-hand what it is all about and gain confidence in their trustworthiness and the work that they do.
In the end, however, it is your decision and your assets that are involved, and you should not feel guilty about doing what you want to do!
Q. When my first wife was alive, I donated my house to a charity with the provision that I continue to use it during my lifetime. Now I have remarried, and my new wife and her disabled son live here, too. Can I change my donation to secure living arrangements for my new family after my death?
A. If your original arrangement was made under a Life Estate agreement, it is an irrevocable form of gift and cannot be changed. At the time of your death, your survivors will have to move. I suggest you meet with your estate planning advisor and set up a survivor trust or other arrangement to take care of your wife and stepson after your death.
Q. I would like to make a gift to some of my favorite charities. However, I'm concerned that once I do I'll be flooded with requests to donate money to other organizations. Is there a way to support the groups of my choice while protecting myself from unwanted solicitations?
A. These days with large, nationally based mailing lists it is almost impossible to avoid solicitations, but here are a few suggestions.
You may ask that your gift be anonymous. Many organizations are careful to respect the wishes of their donors regarding privacy. Also request that groups to which you contribute not place your name on any list that they make available to other organizations. You my further wish to ask that you be excluded from the organization's own mailing list. This, however, may cut you off from all communication with the group to which you are donating.
Q. I have some money that I’d like to leave in my will to some favorite organizations, but I don’t like the idea that my generosity will put me on a list of prospective donors in every group I’m around. How can I be absolutely sure my privacy will be honored?
A. You are to be commended for considering bequests. However, no one need know of your generosity. All reputable organizations will observe your wish for anonymity if you request it. Or you don’t even need to inform them of your bequest, in which case they will only find out about it after your death. A Will becomes a public document when it is entered for probate after your death, but if you have some form of personal Trust, like a “living” trust or Marital trust, your wishes can remain confidential since these trusts are not subject to probate.
If you do want to inform the organization about your plans before your death, simply tell them, in writing, that you do not want to be listed on any donor rosters or other types of donor recognition. They will observe your instructions. (If they don’t you can always take them out of your Will!!)
Q. A couple of years ago you wrote a column about the advantages of donating an unneeded insurance policy to a charitable organization. Now it turns out I have a paid-up policy my family doesn’t need. Could you review that information, please?
A. Giving unneeded insurance policies to charity is an excellent way to make a major gift generally without cost to yourself. You may give most types of policies — whole life, term, 20-pay life, and others. The procedure is simple. Merely notify the insurance carrier that you are signing over ownership and beneficiary rights to whatever charity you choose, and notify the charity that you are doing so.
The insurance company will send you the forms necessary to effect the transfer. Submit the forms and turn over the actual policy to the charity.
If it is a paid-up policy, that’s all you need to do. If premiums are still being paid, then either you or the charity must make them. If you continue to pay them, the premium amount is deductible as a charitable gift on your income tax. If the charity is to pay them you must first get the charity’s agreement to do so and the premiums are not deductible to you.
In either case the cash value of the policy (not the face amount) is deductible for tax purposes. For further information please call the SMC Foundation at (310) 434-4215.