Dave and Cathy were married in their home parish 40 years ago. Their family (kids and now grandkids) has been involved with their parish for a long time. Dave and Cathy have always supported the parish offertory, as well as many of the important projects and ministries of their parish. Now that they are retired, Dave and Cathy have begun considering how they can support their parish after they pass. But they aren’t quite sure where to begin.
What happens to their house when they pass away? Their car? Their bank accounts? Just like Dave and Cathy, if you don’t have an answer to these questions, it might be time to consider your estate plan.
A well-thought-out estate plan is a great tool to plan your legacy. Here are some things to consider.
Wills VS. Trusts
These are typically set up by working with an attorney. Wills and Trusts are the most common tools for estate planning. Both can be fairly simple or complex, and neither option is a “one-size-fits-all” tool. Which one is right for you will depend on your own circumstances and desire for your estate.
Both Wills and Trusts lay out a plan for what happens to your property when you pass away. You can name your family, friends, or a favorite charity as beneficiaries to receive a share of your estate. For example, Dave and Cathy decided to establish an endowment with the Catholic Foundation which will receive money from their estate when they pass away. Their endowment will support their parish, local Catholic school, the Bishop’s Appeal, a homeless shelter, and several other charities that have been important to them. When working with their attorney, they then only need to name their endowment in their Will or Trust instead of naming every charity individually.
One key difference between Wills and Trusts is that a Will takes effect after you pass away. A Trust can be set up to operate while you are still living but are no longer able to handle your finances. Both Wills and Trusts involve nominating a trusted person to manage the estate process. Under a Will, it’s an executor (called a personal representative in Wisconsin). Under a Trust, it’s a trustee.
Another important difference is Wills are primarily used in probate – a court process where the estate is overseen by a judge. If used properly, Trusts avoid probate and can be more private, and sometimes quicker, to fulfill your final wishes.
Beneficiary Designations
Another way to avoid probate is through beneficiary designations. Typically, a beneficiary designation is used on a financial account (checking accounts, savings accounts, retirement accounts, or insurance policies) to tell the financial institution where you want the money from the account to go after you pass. Different institutions have different rules, but you can often name several people or charities as beneficiaries of an account. When you pass away, the beneficiaries will receive their share of the account.
For Dave and Cathy, they also chose to include their endowment as a beneficiary of their IRAs. That way, after they pass, their IRA administrator will send the proceeds of their accounts directly to the Catholic Foundation to be included in their endowment.
The Catholic Foundation helps families consider their legacy, including presenting options for supporting Catholic causes through a Will or Trust, or by beneficiary designation on a financial account. If you’re interested in learning more, visit www.catholicfoundationgb.org.
To learn more about planning your legacy, contact our Planned Giving team by phone at 920-272-8155, or email [email protected].
Disclaimer: The Catholic Foundation for the Diocese of Green Bay, Inc. does not provide tax, legal, investment, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, investment, or accounting advice. You should consult your own tax, legal, investment, or accounting advisors for advice on your personal circumstances.