Galatians 6 says we will reap what we sow, but we don’t always reap and sow in the same season. Legacy Planning is based on a similar principal. Our time on Earth is limited, but with proper planning, our actions and decisions can have an impact that transcends our time here. Our legacies – the lives we touch; the wisdom, values, and traditions we share with others; the ministries that continue due to our support – can affect the world beyond our lifetime.
October is Legacy Planning month, and Covenant Trust Company believes everyone has a legacy. What will yours be? If you’re not sure, here are some tools that can help you take control of the legacy you leave behind.
Generally, trusts can be used to build wealth through asset management and investments. The trust document can designate family, friends, and charities as beneficiaries. Revocable Living Trusts (RLT) in particular are great for Legacy Planning as they allow people to establish for whom the trust will provide, to what extent, and for how long. A trustee can manage assets in an RLT even after your death, relieving your family of this responsibility
As your situation changes, you can amend the trust as needed. Assets to be distributed after you pass are distributed exactly as you wanted and avoid the costs and delays associated with probate. This can provide security for your spouse after your death and assurance that your family will benefit from your legacy plan.
With a Will, you can take important steps to ensure your plans to take care of your family are carried out even after your death. In addition to facilitating the distribution of assets, a Will can also determine legal guardianship of children and name friends and charities along with family as beneficiaries of your estate. Without a Will, these decisions will be left to the probate court, and there is no guarantee that their decisions will provide the type of care and resources for your family that you had intended.
Charitable Gift Annuity (CGA)
We wrote about Charitable Gift Annuities previously. To summarize, a CGA is an irrevocable contract between a donor and a charity: a donor agrees to make a donation to the charity, and the charity agrees to make fixed payments to the donor for the rest of his or her life. After the payments stop, the charity keeps the remainder of the donation. CGAs are popular because it gives donors an additional stream of income while also allowing them to make a considerable donation when they pass.
What will your legacy be? What will you leave behind for others? You don’t need to know all the answers to those questions right now, but we encourage you to take the time and consider what you want to pass on to others and how you want to do it.