When you plan your estate, should you consult your children? Should tradition be your guide? Will family members share your stewardship perspective? Will they want the responsibility of managing property? So many questions to consider. As Christian stewards, it is important that we make every effort to plan wisely with all that God has provided.
Creating an estate plan can be like assembling a model airplane. Your estate – like a model airplane -- is made up of many pieces both large and small. Each piece has a specific purpose, just as each asset of your estate. You have worked hard to gather each piece. Now, how do you fit them together for your family’s lifestyle, providing for the needs of you and your loved ones?
Family Goals and Your Estate
It might be a practical (and loving) idea to understand and consider your family needs and desires. As an example, for you the family home has been a priority. You have ordered your finances and schedule to maintain and enjoy life at home.
Does a similar lifestyle fit your children? They may lack the desire or skill to do what needs to be done to maintain your dream house. Or they may live and work in another state and cannot easily travel back.
What do you do with real estate that you need now, but no one in your family wants when you are gone? It seems that passing a family home or farm to the next generation occurs less than in the past. There are many pieces to sort out.
Assuming your family has no interest in maintaining the family home, and assuming you want to make a gift to ministry in your estate plan, you might consider the value of a Charitable Life Estate agreement.
This planning tool allows you to donate a personal residence or farm to ministry but continue to use it for your lifetime. At your passing, when you no longer need it, the property benefits your chosen ministry.
What are the Advantages?
Consider some advantages of a Charitable Life Estate. First, it can help you fulfill your generosity goals. Second, you may receive a substantial income tax deduction at the time the agreement is established. Also, if you have a capital gain in the property, you avoid the capital gains tax that would have been payable had you sold it. You get to continue to use the property now, knowing that it will benefit your favorite ministry later.
If you are concerned that your heirs will feel you have literally given away the farm, there may be a solution. The charitable deduction tax savings can be used to buy life insurance.
Your heirs receive the life insurance distribution tax-free, and they do not have to worry about managing or selling the property. The contents of the home – heirlooms, photos, and personal belongings -- can pass to them as you desire, preserving family memories.
The Charitable Life Estate does not always fit – consider it carefully. When it does fit, it is a powerful tool for those who want to make a gift of property while continuing to use it during their lifetimes. If you would like to learn more about the Charitable Life Estate, download your free copy of our eBook using the button below, Give it and Live in it – The Charitable Life Estate. As always, there is no cost or obligation. Please let us know how we can help you explore this creative generosity tool.