Why It May Pay to Review Your Will

There are many reasons why you may want to review your will: a move to a new state, a change in marital status, the death of a loved one, or the birth of a child or grandchild.

An additional reason that should not be overlooked is to ensure that your will has not been affected by any changes in the tax law. For example, the exemption for federal estate taxes is currently
$2 million for 2007 and 2008. This will provide tax relief for some who have estate tax exposure, but certainly will not eliminate the need for estate planning. Estate tax changes are already scheduled for years 2009-2011, and many expect Congress to legislate other changes soon.

Finally, you may want to think about making a charitable bequest to a favorite charity or adding a charity to your list of beneficiaries. Since a charitable bequest is generally deductible for estate tax purposes, it is a way to extend the estate tax exemption. It also can be an effective way to help ensure the future good work of St. John’s.

A Bequest Can Take Many Forms

There are a number of different ways to provide for St. John’s in your will. Certainly, the most common method is to bequeath a specific dollar amount to St. John’s. For example, you may direct, in your will, that $100,000 be paid to St. John’s at your death.

On the other hand, you may find it more advantageous to direct that a percentage of the value of your estate (e.g., 10 percent of the net value of your estate) be paid to St. John’s at your death. With a percentage-of-value bequest, we will share in increases or decreases in the value of your estate.

Of course, you can bequeath almost any type of property (e.g., stocks, bonds, royalties, a residence or other real estate) to us. In some cases, a bequest of property can have unique tax advantages for both your estate and your beneficiaries. In other cases, a bequest of a specific property would be uniquely helpful to our mission.

Another alternative would be to bequeath all or part of your “residuary estate” to St. John’s. This means that we will receive all or part of whatever is left in your estate after all outright bequests have been satisfied.

Contingent Bequests

One hallmark of a thoughtful and practical will is anticipating the improbable by naming contingent beneficiaries. For example, you may bequeath $100,000 to your brother and then name a contingent beneficiary to take the bequest if your brother is not living at the time of your death. If you feel that you should not presently make an outright bequest to St. John’s, you may want to consider naming us as a contingent beneficiary of all or part of your estate.

Consider the Possibilities

A carefully planned will is a valuable instrument, ensuring your plans are carried out and making it possible to create a personal and meaningful legacy. Now may be a good time to review your will with your attorney, investigate your options, and consider how you might make a lasting impact on St. John’s.

A Unique Opportunity: The IRA Charitable Rollover

A recently enacted law (the Pension Protection Act of 2006) makes it possible for donors age 70 or older to make distributions directly to charity from their IRA accounts. The advantage is that the donor does not need to report this distribution as income for federal tax purposes. Previously, making a gift from retirement assets required taking money out of the account, paying taxes on the distribution, then making the gift and taking an income tax deduction. The IRA Charitable Rollover simplifies this process because distributions are made directly to the charity and are not included in federal taxable income.

Donors who make an IRA Charitable Rollover may count the distribution to charity towards the required minimum distribution — the amount that normally must be taken from the account each year. Although there is no income tax charitable deduction for the rollover, it’s a very smart way to give because (1) it’s an easy, one-step way to satisfy minimum distribution requirements, and (2) a distribution that would normally be diminished by income taxes is given in full to make a difference in our work.

Note that there are certain conditions – there is a limit of $100,000 per year, and under current law the opportunity is only available until Dec. 31. Nonetheless, the IRA Charitable Rollover is a welcome addition to the different ways to give to worthy charities such as St. John’s.
Check with your advisors to learn if the IRA Charitable Rollover is a good option for you. We are also glad to provide basic information about this new way of giving – simply contact our office for more information.

We are happy to provide information about the many ways to support our work through planned gifts that can also play an important role in your estate planning. Contact us at 417-820-6111 or toll free at 866-266-4584.                 

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