Stewardship Ministry: Estate Planning
Concerns about how to begin your estate planning, what costs will be involved, how to maintain confidentiality and how to ensure the trustworthiness of the individuals doing the planning? Most people realize estate planning is very important, but many have never been shown an effective way to ensure their planning is handled accurately and according to their stewardship objectives. Calvary Chapel recognizes these valid concerns and has established an estate design service free of charge to anyone who considers this their church home as part of the Stewardship Department. Most importantly, whether you have an existing estate plan you would like to have reviewed or you have never established a plan, your design will be created from a Christian perspective founded on the principle that God is the owner of all (I Chronicles 29:11).
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Regardless of whether Calvary Chapel is included in your plan, this service is available to you at no charge as a way of helping you travel a path of faithful stewardship as you store up for yourselves treasures in heaven where neither moth nor rust destroys, and where thieves do not break in or steal; for where your treasure is, there your heart will be also (Matthew 6:20, 21).
I. Planned Giving
Nearly everyone in America would agree on the importance of having a strong estate plan in place. Yet more than 70 percent of Americans do not even have a current will. Despite the best intentions, many people hesitate to take the necessary steps to design a plan for their estate.
What are the reasons for delaying an estate planning decision? Usually it is uncertainty over how to go about preparing an estate plan; how to choose a competent attorney; or the cost of estate planning services.
As we search the Scriptures, we discover God's heart on the matter of planning and giving. John 3:16 teaches us that giving is a natural response of love: "For God so loved the world that He gave His only begotten Son…" 1 Timothy 5:8 warns us against failing to provide for our family's needs: "But if anyone does not provide for his own, and especially for those of his household, he has denied the faith and is worse than an unbeliever." Matthew 6:19-21 advises us to keep an eternal perspective when we make choices that affect our stewardship of God's gifts: "Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also." Proverbs 3:9 inspires us to "Honor the Lord with your possessions, And with the first-fruits of all your increase."
Help you to biblically and financially plan for the future and distribute your estate, Calvary Chapel Fort Lauderdale has arranged to subsidize the costs associated with having your estate designed by our Stewardship Department through our partnership with Lifestyle Giving. Lifestyle Giving is a Christian estate-planning organization whose hallmark is helping people make sound estate planning decisions, and will make it possible for you to leave behind a legacy of love, provide for your family, be a good steward of your gifts, and honor the Lord in your estate plan. They can also recommend ways to avoid excessive taxes and unnecessary expenses. If you would like to allocate part of your estate to advancing the work of God's Kingdom by arranging a gift from your estate to Calvary Chapel Fort Lauderdale, or any other charitable organization of your preference, the professionals at Lifestyle Giving and local contact personnel in our Stewardship Department will coordinate that as well.
Please call 954-556-4606 for additional information.
II. Wills and Trust
A Last Will and Testament is the basic estate planning document created during one’s lifetime which becomes effective upon death. The Will controls the distribution of all property that is in the decedent’s name alone at the time of death. Trusts may be created within the Will for spouses, minor children, loved ones with special needs, and charitable organizations. A personal representative and a trustee are named to manage the assets and to assure that the decedent’s wishes are carried out. The Will is also the document in which guardians for minor children are named.
A Revocable Living Trust is a more advanced estate planning document designed to manage your assets during your lifetime and distribute them upon death. A Trust is advantageous for people who have a variety of assets, assets in different states, need assistance in managing their assets, wish to avoid probate proceedings, or require advanced tax planning. Upon death the assets may be distributed outright or held in trust for the benefit of loved ones and charities.
III. Charitable Lead Trust
Charitable Lead Trust (CLT)
A charitable lead trust is the opposite of a charitable remainder trust (CRT). The CLT provides an excellent opportunity to provide immediate support for your choice of charities rather than through one of many deferred gift plans. The income generated by the trust assets is distributed to the charity during your life. At the termination of the trust, the principal reverts back to you or may be distributed to one or more persons you designate.
- Beneficial for significant estate and gift tax concerns
- Can see the immediate effects on the charity or charities
- Leave assets for loved ones at a significantly reduced gift and estate tax cost
- The principal goes to the ministry and cannot go to your heirs
- The IRS assumes the trust will earn a certain percentage each year; if the trust fails to earn the specified percentage, penalties will apply
- Legal counsel should prepare trust documents
Asset considerations for CLTs:
- Real estate
- IRA and other retirement plan assets
If you would like further information on CLTs, contact your financial advisor, attorney or the Calvary Chapel Stewardship Department at 954-556-4606.
IV. Charitable Gift Annuity
A Charitable Gift Annuity allows you to make a gift to a charity, while providing you fixed payments for life.
- Income beneficiary earns a fixed annual income
- Established with a minimum of $10,000 in assets
- Income tax deduction for the gift portion
- Fixed payments
- Percentage payment linked to donor’s age – the younger the donor the lower the percentage
Asset considerations for CLT:
If you would like further information on Charitable Gift Annuities, contact your financial advisor, attorney or Lifestyle Giving.
V. Gift of Real Estate
Upon completing a due diligence review, Calvary Chapel Fort Lauderdale will gratefully accept both developed and undeveloped land. Gifts of appreciated real estate are attractive from a tax standpoint. You may receive a charitable income tax deduction reflecting the full market value of the property and further avoid capital gains taxes that you would otherwise incur had you sold the property outright.
- Income to the donor can be arranged through a charitable remainder trust
- Donor will receive a tax deduction for the gift year
- Donor will avoid capital gains tax
- May be used in conjunction with other gift arrangements
VI. Gifts of Stock or Mutual Funds
Did you know that a gift of appreciated stock may be more favorable than a cash donation? If you have stocks or mutual funds that have significantly appreciated in value, you may face substantial income taxes upon sale of these assets. One way to reduce these taxes is to consider giving appreciated stock or mutual fund shares to a charitable organization.
- You will receive the appreciated value of the stock or mutual fund as a tax deduction, not the cost. Example: You purchased 1,000 shares of XYZ for $2,000 in 1995. XYZ is now valued at $10,000. The current tax deduction would be for $10,000 and not the $2,000 initially invested.
- Gift of stock will provide the benefit of bypassing capital gains tax. Since a charity does not pay tax, you may give the stock to a ministry and bypass the capital gain.
- Making a Stock Gift:
If you are planning to make a gift of stock to Calvary Chapel Fort Lauderdale, please contact the Administration Office at (954) 315-4337 for our brokerage account information. We will provide you with an information sheet and a sample letter to facilitate the transfer.
VII. Charitable Remainder Trust
A charitable remainder trust (CRT) is created by transferring a portion of your current assets to a trust. The trust pays a fixed percentage of income benefit for life. The minimum 5-20% income required to be paid to the income beneficiary annually. At the death of the donor or donors the remaining assets are transferred to the charity or charities named in the trust.
- Annual income for life
- Income-tax deduction at the inception of the trust
- Prevention of capital gains and gift taxes which can often range from 10 percent to 20 percent
- Annual trust accounting required
Types of asset considerations for CRATs:
- Appreciated or low-yield securities
- Real estate
- IRA and other retirement plan assets:
If you would like further information on CRTs, contact your financial advisor, attorney or the Calvary Chapel Stewardship Department at 954-556-4606.
VIII. Gift of Life Insurance and Life Insurance Trusts
There are several ways to create a gift from existing insurance coverage or by buying a new policy. If you have paid for existing insurance coverage that is no longer required, you can give the policy to a charity. The following is a list of possible insurance policies to consider for charitable gifts:
- Life insurance to protect a spouse that no longer needs protection
- Life insurance on a child that is now a financially independent adult
- Life insurance on a life to guarantee funds for a child’s education that has since been paid from other sources
- A policy to provide retirement income that has now been provided by other sources
- Coverage on a business or a business partner that is no longer required
By making Calvary Chapel Fort Lauderdale or other ministry the irrevocable owner and beneficiary of a policy, you may be entitled to a tax deduction approximating the cash surrender value at the time of the gift. Please seek the assistance of your qualified insurance agent to make a change in ownership and beneficiary, determine cash surrender value, and to make sure you have adequate coverages for your current situation.