Commonly Asked Questions
by David Burrier, Director of Estate & Legacy Planning
Q: Can you share a little about yourself and how long you have been on staff at Hope Ministries?
A: I have had the pleasure of serving on our ministry team for over 15 years. For ten of those years I served as our development & community relations director. I now serve in a specialized field as our director of estate & legacy planning. Previous to my appointment at Hope Ministries I attended Wartburg College and have worked in the financial services industry and for various non-profits including academic and social services over the past 37 years. I have been married 40 years and have three married children and six grandchildren.
Q: What is Legacy Planning and how does that differ from traditional Estate Planning?
A: In my role as director of estate & legacy planning I have the opportunity to assist our donors by providing free no obligation assistance which includes helping you draft your legacy message, identifying estate planning objectives and coordinating professional advisor communication.
Legacy Planning adds a new and unique element to traditional estate planning. It involves more than simply making arrangements for transferring money and assets to the next generation. Legacy planning integrates a values based discussion which focuses on what message you wish to leave for your children, grandchildren and others. It is an opportunity to give something of value beyond tangible assets. This is something more and more people are thoughtfully considering.
Q: Are you an attorney, financial planner or counselor?
A: I am not an attorney, financial planner or counselor. I have spent over 35 years in the areas of estate and financial planning, public relations and resource development including teaching on the corporate level. My career has required working with a host of professional advisors on behalf of my clientele including attorneys, accountants, trust officers, investment advisors, realtors, insurance agents, bankers and more. My role as director of estate & legacy planning at Hope Ministries involves assisting people by guiding them through the estate planning process including coordination of communication between these various advisors (if needed) to fulfill your goals and objectives.
Q: What is your process when you meet with people to do estate and legacy planning?
A: I first assure you that I am 100% committed to helping you achieve your estate and legacy planning goals and objectives. When I'm meeting with you, my role with Hope Ministries is secondary. Since my service is free and requires no reciprocation or obligation to Hope Ministries, we are able to focus on a thorough legacy planning process. My goal is to identify any potential gaps in your planning and final preparations. I achieve that by utilizing a comprehensive questionnaire and checklist.
My experience has revealed that few people have actually crossed all their T's and dotted all their I's. Many, in fact, are surprised by some of the planning ideas I introduce that they could be taking advantage of. In other words, "you don't know what you don't know".
When it's all said and done, there are only three choices people have to distribute their assets at death:
Frankly, I've never met anyone who looks forward to having a portion of their estate paid to the government although some have inadvertently done so due to poor planning. So if you remove option three that leaves family and charities and there are a myriad of planning strategies that can be utilized to accomplish your objectives.
Once we have established your legacy goals and the message you desire to send to the next generation, I conduct an estate inventory and review your current plan if you have one.
Sometimes (but not always depending on the size and breadth of your estate) I offer our free confidential estate plan review service. This service utilizes the expertise from a team of professional advisors representing six different disciplines who review your current estate plan. They consider your values, goals and objectives and offer potential planning considerations that can often improve on your current estate plan. This is all strictly confidential. This process does not identify your name, SS #, place of employment or any contact information — only your goals and objectives and your current estate plan.
This group of volunteers includes an estate planning attorney, financial planner, trust officer, CPA, an insurance professional and myself. This confidential review often results in planning considerations that provide you with options not previously considered. Following that process, you make decisions and I assist (if needed) in coordinating communication with your current or new professional advisors to see your plan to completion. My ultimate goal is your peace of mind.
If you have no current estate plan, then this group is especially helpful in formulating a plan for your consideration.
Q: Isn't estate and legacy planning for older people? We still have children at home or in college. Isn't this sort of planning something we would think about in our later years?
A: The short answer is no. Another short answer would be that depends. There are various phases in life that require different approaches to planning. Estate and financial planning goals and objectives for younger married couples with children or younger singles will generally differ from those individuals who are approaching or beyond retirement years. Protection for your family, your assets, naming a guardian for your minor children as well as your power of attorney and a living will, advance directives, choosing executors and utilization of various trusts would be common planning objectives you may consider. So, no matter your age or phase in life, estate and legacy planning is a stewardship responsibility and opportunity you have as you consider issues that affect your loved ones even beyond your lifetime.
Q: We don't have a whole lot, so considering a charitable legacy gift is probably not something we could do. Or are there opportunities for people like us?
A: It's not uncommon for people to dismiss the possibility of creating a charitable legacy gift because of perceived limited assets. Far too often people are more focused on the importance of the amount of such a gift rather than the message. What I mean is that when it comes to remembering one or more charities in your estate plan the message may be even more important than the actual amount of money you send to the next generation. If you have a charitable intent it doesn't have to be complicated. For example, nearly 90% of all Americans own some kind of life insurance. In most cases naming a favorite charity to receive 1% of the primary beneficiary of your individual or employer's group term life probably wouldn't cause a financial burden to your survivors. That would amount to a $1,000 charitable gift at your death on a $100,000 policy. The same can be done with retirement plans, commercial annuities — anything that requires a beneficiary designation. Changing a beneficiary designation is the simplest way to arrange a charitable legacy gift and it doesn't cost anything. Naming a small percent in your will for a charity is another simple way to fulfill your charitable intent. Again, it's not the amount of money, it's the message it sends to the next generation. If the organization was worthy of your support during your lifetime, the need for your support will be no less the day you die. It's worth considering.
Q: I already have a will and/or trust and my estate plan is completed. Why would I need to have you visit with me?
A: That is another great question. If, in fact, you have an up-to-date will and estate plan and are 100% sure that you have crossed all your T's and dotted all your I's, then I extend my congratulations to you. Frankly, I've not met many people over the years that have.
If, on the other hand, you see value in having an objective seasoned professional review your estate plan as I've outlined above, then you're not losing anything by having a second opinion, no matter the size of your estate.
I would also remind you that we offer the free confidential estate review service from our volunteer team of professional advisors from six different disciplines who can review your current plan and offer potential planning considerations.
I can share that on one particular situation I assisted with, this advisory team revealed the fact that the estate plan they were reviewing was going to result in a $4.1 million dollar tax bill when the client died. It is true that this person had an up-to-date will, but what we discovered is that it certainly was NOT a tax-wise will. Through some special planning, we were able to wipe out that tax liability and her grandchildren ended up with more inheritance as a result. So (as you can see) there can be benefits in taking advantage of our estate and legacy planning service.
Q: I have more hard (tangible) assets than I do cash assets. Are there ways to leverage these assets to maximize tax and other planning objectives?
A: The short answer is yes. There are various tax-wise strategies to address the transfer of tangible assets. There are some creative ways to do that during your lifetime and additional creative ways to make plans now to accomplish that upon your death. Exploring these options is part of the estate and legacy planning process and I often find that most people are generally not aware of all their options. Again, "you don't know what you don't know".
Q: Is it a mistake to leave a lot of money to my children and grandchildren?
A: This is a question that I am often asked actually. It's a legitimate question and it is a concern of many people I've worked with over the years. The answer will depend on a number of factors and that differs for everyone of course. There certainly are cases that can prove the harmful effects of "setting your children or grandchildren up financially for the rest of their life". However there are various trusts arrangements that can be used to manage the "wind-fall" affect. A " give it twice trust" can be used effectively especially when you have multiple planning objectives and wish to benefit both your family and a favorite charity. This is an issue that we can discuss and is often resolved when identifying your values and planning objectives.
Q: If I leave part of my estate to worthy causes should I state a percentage or an amount?
A: When I've asked attorneys over the years what they feel is best most have suggested going the percentage route. It's not that you can't name a specific amount and we have actually received specific amount bequests in the past, but the concern is whether the balance left in the estate after probate will be able to fund the originally stated bequest amount in the will. This is something you'll want to consult about with your attorney.
Q: I don't have an attorney or I'd like a new one. Can you recommend one or refer me to one?
A: Over the years I have been fortunate to have worked with a number of attorneys when assisting donors with their estate planning. I have found that not all attorneys are educated in the specialized field of estate, gift and tax planning. Some are generalists in nature. What I can do is provide a list of attorneys I've worked with that do have that special knowledge that I look for when working with our donors. This at least saves you the time of researching and puts you on a path to select the attorney of your choosing.
Q: Can you help me get organized with my documents? I have things here and there and it would be a mess for my survivors.
A: This is not uncommon in my experience working with hundreds of people over the years, so don't be embarrassed. In fact, one of my favorite things to do is assist people in getting things gathered up and organized in a fire and water safe Legacy Box. It's really a form of stewardship and also sends a positive message to your survivors that you made it a priority to have your final plans in order and accessible. You'll have that peace of mind and a sense of accomplishment when it's all completed.
Q: What does all this cost?
A: As I indicated before, my services are free and with no obligation to our faithful donors. So many have commented on how much they appreciate having someone to talk to and ask questions to without worrying about what it will cost them. You really have nothing to lose in taking advantage of this unique and confidential service.
Q: Isn't your ultimate agenda to see how much I might leave to Hope Ministries in my estate?
A: I can understand why some people might ask that question since I am a paid employee of Hope Ministries. There is no hiding the fact that we encourage our faithful donors to consider remembering people who are homeless and hungry with a charitable bequest in their will, trust, beneficiary designations or some other planned gift. However, this is NOT my first concern. The fact that I work for Hope Ministries is secondary. In fact, there have been many times over the years where I've helped people arrange for charitable estate gifts to other worthy causes. Obviously folks often have more than one organization they've supported during their lifetime and may desire to share a portion of their estate with them. In addition, some folks choose to not include any charitable gift planning as part of their estate planning goals. As I've shared previously, I am 100% committed to helping our donors achieve their estate planning goals and objectives regardless of their charitable giving intentions — and every situation is unique.
Q: How long does this process take?
A: The estate and legacy planning process varies case to case. There are variables that contribute to the length of the process. For example some people have no will and haven't started any planning. In other words, in those situations we're starting from scratch. It also depends on the size of your estate. If your estate is quite simple and you just need to get organized with your documents and arrange to schedule an appointment with an attorney to draft a simple will, this would only require one or two home visits to complete the checklist and insure that all your bases have been covered. Other situations may require several initial home (or office) visits followed by coordination of various visits with professional advisors.
Q: Where does this planning take place?
A: Many of my meetings with donors occur in their home or place of business. Others can occur in my office at Hope Ministries. I am flexible and able to meet where ever is convenient for you.
Q: Should I involve my adult children in my estate planning process?
A: The answer would depend on your relationship with your adult children. Some people I've worked with over the years have chosen not to communicate their estate plans with their family before their death. Some of these situations have turned out all right while others were disastrous. I would say that whenever possible it would be good to let your family know your plans especially if you've incorporated any gift to charities. Generally it is best if they know these things ahead of time to avoid family conflict later. I have also appreciated in the past when a member of the family has been present during my estate and legacy planning process with a client/donor. I've found this to be a good practice whenever possible to avoid any misunderstandings.
Q: If I were to consider including Hope Ministries with a charitable legacy gift in my estate plan, what are some simple ways I could do that?
A: A last will and testament, trust or beneficiary designation is the most common and simplest way people make charitable legacy gifts (bequests) to worthy causes they've supported during their lifetime.
Below is suggested language for directing your will or trust bequests, beneficiary designations and memorials:
Through Your Will
The following wording can be used when naming Hope Ministries to receive a charitable bequest in your last will and testament.
I, [state your name], of [city, state, zip], give, devise and bequeath to Hope Ministries, an Iowa not-for-profit corporation, tax ID# 42-1512992, [amount or percentage of the estate or description of property] and the rest, residue and remainder of my estate both real and personal for its unrestricted use and purpose.
Gifts can be designated to the general operating fund or the Hope Ministries permanent endowment fund.
Through Your Primary Beneficiary Designations
You can name Hope Ministries as part of your primary or contingent beneficiary on your retirement plans, life insurance policies, commercial annuities, investments and/or bank accounts by filling out a form separate from your will. The custodian of your retirement plan or IRA or your insurance agent, banker or investment advisor can provide you with the right form.
______% to spouse or children, _____________% to Hope Ministries, Des Moines, Iowa tax ID# 42-1512992
Through Your Memorial Contributions
To specify for yourself or a loved one, we would invite you to use the sample text below.
We would be blessed if you would help those who are homeless and hungry by sending your memorials in memory of [Name of Deceased] to Hope Ministries, P.O. Box 862, Des Moines, Iowa 50304-0862.
Make the Most of Your Gift
In most cases your family can inherit appreciated assets, like stocks and real estate, without paying taxes on them. Any retirement assets you family inherits, however, will be subject to an income tax. Naming Hope Ministries in a beneficiary designation of your IRA to be paid after your death can save its entire value by avoiding taxes. All gifts to Hope Ministries are tax exempt which means every penny of every gift is used to support our mission. There are additional planning strategies that could enable your family members to benefit from these or other assets at your death.
Tax-Free Charitable Donations From IRAs for 70 ½ or Older
Since 2006 law makers have allowed certain owners of individual retirement arrangements (IRAs) to make tax-free transfers to eligible charities.
For eligible tax years, individuals age 70½ or over can exclude up to $100,000 from gross income for donations paid directly to a qualified charity from their IRA. Key points about qualified charitable distributions (QCDs) include:
- The donation satisfies any IRA required minimum distributions for the year.
- The amount excluded from gross income isn't deductible.
- Donations from an inherited IRA are eligible if the beneficiary is at least age 70 ½.
- Donations from a SEP or SIMPLE IRA aren't eligible.
- Donations from a Roth IRA are eligible.
- Married individuals filing a joint return may exclude up to $100,000 donated from each spouse's own IRA ($200,000 total).
- Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.
Each year the legislature has to approve the renewal of this benefit which has often been the 11th hour. For example in 2014 the Tax Increase Prevention Act, was enacted on Dec. 19, extending the law for 2014. This provided a very narrow window for IRA owners age 70 ½ or older to make a direct transfer of part or all of their IRA distributions to an eligible charity before the end of the tax year.
Always consult an attorney or tax professional regarding your specific legal or tax situation.
If you have already named Hope Ministries as a beneficiary (part or all) of your retirement assets or life insurance or some other way in your estate plan, please let us know so we can say "thank you" and invite you to be named in our Legacy of Hope Society.
Q: Can you briefly outline some of the benefits of some estate and legacy planning strategies that would involve charitable gifts?
A: Yes, however understand this is a very brief summary. Further discussion and consideration of your estate planning goals would be required to determine whether these would be appropriate for your situation.
Here are just six examples:
- You may be tired of living at the mercy of the fluctuating stock and real estate markets. Did you know that you can make a gift to a qualified charity that can provide you with a secure source of fixed payments for life? You can donate a sum of money or appreciated stock, receive a tax deduction, reduce or eliminate capital gains tax and receive income from that donation for the rest of your life — part of which could be tax-free income. You can also set up the plan now but defer your income to a stipulated time in the future.
- Some people would like to benefit a worthy cause they have supported during their lifetime but do not want to sacrifice what they would like their children or grandchildren to inherit when they die. Or you may want to explore ways you could actually provide your children with income while at the same time making a gift to Hope Ministries. The "give it twice" trust is a popular option that allows you to transfer your IRA or other asset at death to fund a term of years trust. We call this kind of trust a give it twice trust because you can use the trust to pay income first to your family for a number of years and then distribute the balance of the trust to Hope Ministries or any other charity you wish to name. With this type of trust you get to use the full value of your asset to provide income to your surviving spouse and to provide income to children or other loved ones for a specified period of time. In addition you create an estate tax deduction and savings from your charitable gift.
- You can set up a plan (while you're living) to benefit you and/or your spouse during your lifetime. You can make a gift of cash, appreciated stock or some other asset to a qualified charity where they establish a special trust. You receive a tax deduction, reduce or eliminate capital gains tax and receive income for a period of time (say 20 years) after which the remainder of the trust will go to the charity of your choice?
- You may be looking for a way to pass on some of your assets to your family while you're living or at your death and reduce or eliminate gift or estate taxes. You can accomplish this by making a contribution (cash, stock or other property) to fund a trust that pays Hope Ministries income for a number of years. This allows you to receive a gift or estate tax charitable deduction at the time of your gift. After a period of time, your family receives the trust assets plus any additional growth in value. You can implement such an arrangement while you are living or have it implemented at your death. This plan allows you to pass inheritance on to family at a reduced or zero cost. And you can also establish a vehicle from which you can make annual gifts to charity.
- You may desire to leave your home or farm to a charity at your death but would also like to receive a current charitable income tax deduction. Did you know you can make a gift of your residence or farm to a qualified charity while you're living, receive a federal income tax deduction for the value of the remainder interest in your home or farm and still live in your residence for the rest of your life and/or preserve the use of the property for you and a loved one, such as a spouse or dependent child?
- Do you have appreciated assets, such as stock, bonds or real estate, producing little or no income? As you know, if you sell your appreciated assets, you will pay a large capital gains tax. But there is an estate planning strategy that allows you to avoid capital gains tax. A charitable trust can be established where you transfer a portion of your appreciated assets, receive an income tax deduction and generate income for the rest of your life. You can use this cash to purchase another residence, to save for retirement, to travel, to meet your daily needs or to meet some other financial goal.
Obviously all of these planning strategies are coordinated with your professional advisors once we determine they are appropriate for your unique situation and consistent with your estate planning goals and objectives.
Q: What is the Legacy of Hope Society?
A: Most charitable organizations have a recognition society for donors who have made arrangements to leave a charitable bequest in their will, trust, beneficiary designation or some other planned gift. The Hope Ministries Legacy of Hope Society was established for just that reason. Donors are encouraged (but not required) to notify us of their bequest intentions. Those that do are invited to have their names added to our recognition plaque. Some people prefer to remain anonymous (which we totally respect) and choose to let us know of their bequest intentions but wish not to have their names listed anywhere during their lifetime. The enclosed form is for that purpose.
Q: I've heard people refer to a Christian will. What does that mean and how do I obtain one?
A: More and more people are choosing to include a statement of their Christian faith at the beginning of their will document. This statement is commonly referred to as a Christian Preamble. This is not something you can expect an attorney to ask you about. It is something you need to bring up when you have your will prepared. It provides a lasting legacy and permanent public record of your Christian testimony for future generations. Every person has their own way of expressing their faith. An example is provided below:
I, [insert your name], child of God, resident of the county of [insert county name], in the state of [insert name of the state you reside], in gratitude to Almighty God for the eternal life which I have received through Jesus Christ, and mindful of the abundant blessings which God has given to me during my lifetime, make this my last Will and Testament in the name of the Father and of the Son and of the Holy Spirit. Amen!
I commit myself to God's care, secure in His love and forgiveness for me and trusting in the salvation purchased for me through Christ's suffering and death. I leave those who survive me and all future generations the comfort of knowing that I have died in this faith and have now joined my Lord in eternal glory. I commend my loved ones to the protecting arms of God, confident that He will continue to provide for them despite my absence; and I encourage them to place their faith and trust in Him alone.
Q: I have questions that you have not included in this document. Can I call you anytime with questions relating to estate and legacy planning or am I required to be a financial donor of Hope Ministries?
A: Yes. I am available to you anytime and welcome the opportunity to assist you with your planning.
Q: Are there other sources where I can obtain estate and legacy planning information?
A: Yes. The purpose of this document was to introduce myself to you and provide a basic overview of the free services I provide and commonly asked questions. Another valuable service we provide to our donors is our LEGACY PLANNING pages on our website at www.hopeiowa.org. Here you will find a plethora of information on a variety of topics. Be sure to sign up for my e-newsletter on-line which many people find to be timely and informative.
Another source of information is the LEAVE A LEGACY® Iowa website where you'll find numerous articles on a variety of topics related to estate and legacy planning.
Q: What is the best way to contact you?
A: My contact information is as follows:
David L. Burrier
Director of Estate & Legacy Planning — Hope Ministries
5075 E. University Ave., Suite B
Pleasant Hill, IA 50327
Cell: (515) 414-0957
Off: (515) 265-7272