Q: Does the size of my estate determine whether or not I need an estate plan?

A: As his stewards, God wants us to decide how to use (and give away) whatever he has entrusted to us. Without an estate plan, these decisions are left to others.

Q: Where should I start?

A: Begin with these questions: Whom do you want to inherit your assets? Do you want your estate plan to reflect biblical stewardship? Whom do you want raising your minor children if both parents have died? If you are physically or mentally unable to make financial or medical decisions, whom do you want making those decisions for you? A basic estate plan that legally provides answers to all these questions will contain, at a minimum, a will, a power of attorney, and a health care directive (also referred to as a living will). For most people, a revocable living trust may also make sense.

Q: If I die without a will, who inherits my estate?

A: Dying without a will triggers the “intestate” laws of your state of residence (with minor exceptions). Those laws provide for a distribution of your individually-held assets which may be very different from what you would have chosen. This can cause confusion, disruption, and unnecessary expenses for your heirs. In addition, no gifts will be made from your estate to your church.

Q: If I die without a will, who will decide who becomes the guardian of my minor children?

A: A will is the place to designate a guardian for your minor children. If neither parent has a will and both die, then the state will appoint a guardian. This person may not be the one you would have chosen.

Q: Don’t I have to be wealthy to benefit from a revocable living trust?

A: The major reason for executing a revocable living trust is to avoid the time and costs of a public probate proceeding. To have effect, a will must be filed with a probate court upon death. However, a trust will distribute assets as the trust designates and is not subject to approval by a probate court. A properly drafted estate plan which includes a revocable living trust will also contain a “pour over will” which appoints guardians for minor children and makes sure that all assets will be subject to the terms of the trust.

Q: Is it a good idea to talk to my family about my estate plan?

A: End-of-life issues and inheritance can be difficult for family. By discussing your intentions with your family, including any charitable gifts you have designated, you help to prevent confusion and disagreements among your heirs. They especially need to know your wishes regarding how medical decisions should be made if you cannot make them.

Q: Are there ways to give gifts to my church now that will continue to pay income to me and also provide an income tax deduction?

A: If you place income-producing property into a charitable remainder trust, income from the property can be paid to you while you are living, a portion of the value of the property can be deducted from your taxable income in the year you placed it into the trust, and the property passes to your church at your death.

So, what now? If you don’t have a will, power of attorney and health care directive, make plans to get them done as soon as possible. If you do have all three documents, you need to check them regularly to make sure they still represent your wishes and comply with current federal and state law. Remember that being a faithful steward includes having an estate plan which reflects your care for your family and your partnership in the gospel with your church.

Roy Heggland serves the CLB as Associate for Biblical Stewardship.

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