Planning for the Future: Wills and Trusts

Estate planning begins with the definition of goals. The process involves considering current and future needs, defining a way to meet those needs through management of assets during life, and providing for the distribution of those assets upon death. Some people have tax-savings as their primary goal. Non-tax issues, such as providing income for a friend or family member drive others.

Regardless of the motivation for estate planning, it is important to have the assistance of legal counsel. Attorneys and financial advisors are able to assess individual estate planning objectives and identify potentially adverse tax consequences. Legal counsel is necessary to draft trust agreements, Wills and other estate planning documents. Any estate plan should be reviewed periodically to incorporate changes in tax laws, and to consider an individual's changing needs, goals and intentions.

1.      What is "Charitable Estate Planning?"

Benefactors who wish to make a gift to The DSU Foundation that complements their lifestyles and goals often do so through thoughtful and well-drafted estate plans. These individuals know that it is possible to make a significant future gift in a way that will not affect their finances today. In fact, they know that such a gift can help them achieve many of the estate planning objectives they have established for themselves, their family and the charitable organizations that matter the most to them. An estate plan not only divides and distributes property, it can provide security for loved ones, minimize taxes and estate costs and, through a variety of testamentary gifts, create a lasting legacy for DSU.

2.      Does Everyone Need a Will?

A Will is often the foundation of a sound estate plan. No matter what size of estate an individual has, everyone should have a Will. This document allows an individual to control exactly how his or her estate will be managed.

Without a Will, there is a risk of costly delays in the estate settlement process. In addition, if a person dies without a Will, the law of the state in which the person lived will determine how his or her estate is divided. State laws generally provide for distributions to natural or adopted relatives, and provide nothing for friends or favorite charitable organizations. If there are no relatives, an estate is turned over to the state.

Wills are not just for single people; married people need Wills to distribute their property according to their wishes. Although it is possible to pass some property to others through certain types of joint ownership, such as joint tenancy, it still is important to have a Will.

3.      Is it Easy to Make a Bequest or a Gift Through My Living Trust?

A bequest for DSU can easily be included when drafting a Will for the first time, or by adding a Codicil to an existing Will. Similarly, a gift provision for DSU easily can be added to a revocable trust agreement. If desired, the benefit to DSU can be deferred through a special testamentary gift arrangement, while lifetime income is paid to a family member or another person.

There are three types of typical bequests, or gifts through living trusts, to The DSU Foundation: specific, cash and residuary. Bequests can be of any size, and may be of cash, securities, real estate or other property.

4.      Can I Specify How My Gift Will Be Used?

In making a bequest or a gift through a living trust, it is important to remember that such a gift can:

 ·  be designated for a restricted or     unrestricted purpose;

·     establish a permanent endowed fund (e.g. the principal is held in perpetuity; only a portion of the fund's investment return is spent, and the rest is reinvested so that the fund maintains its value over time), or a

·      non-endowed fund (both principal and investment return on the fund may be spent); and

·      be made in the name of the donor, in honor or memory of a friend or loved one, or augment currently existing named funds.

If a donor wishes to specify the preferred use of his or her bequest or gift provision, or if a donor wishes to create an endowment through a bequest or living trust gift, DSU can help accomplish these objectives. The Development Office assists donors in creating a gift that best meets each donor's individual needs and interests. Working individually with donors and their advisors to determine what the donors hope to achieve for DSU through their Wills and living trusts, these planned giving professionals also develop and provide sample bequest and gift provisions, and the correct language for establishing endowments.

5.      Is There Sample Language That I Can Show To My Attorney?

The following are three examples of the three types of outright gift provisions. The sample language illustrates how a bequest or a gift through a living trust can be accomplished, and is intended to be used for educational purposes rather than as advice. We encourage donors to share this information with their legal counsel, and recommend that anyone undertaking estate planning do so with the consultation of an attorney.

A.     Specific Bequest to The DSU Foundation

A specific bequest gives a specific item or specific piece of property to The DSU Foundation. Such bequests are fulfilled first, before cash and residuary bequests. If the donor disposes of the specified property during his or her lifetime, there will be no bequest to The DSU Foundation.

I give ________________ (describe asset) to The DSU Foundation, a Mississippi non-profit corporation, 1003 West Sunflower Road, Cleveland, Mississippi 38732, to further the objectives and purposes of DSU (or specify the College, or a School, Division or Department at DSU).

B.     Cash Bequest to The DSU Foundation

A cash bequest provides The DSU Foundation with a specified sum of money from a donor's estate. These bequests are fulfilled second, after specific and before residuary bequests.

I give _____ Dollars ($_____) to The DSU Foundation, a Mississippi non-profit corporation, 1003 West Sunflower Road, Cleveland, Mississippi 38732, to further the objectives and purposes of DSU (or specify the College, or a School, Division or Department at DSU).

C.     Residuary Bequest to The DSU Foundation

A residuary bequest is made from the residue, or what remains in a donor's estate after specific and cash bequests, taxes, settlement costs and debts are satisfied. This type of bequest is sensitive to changes in the size of the estate over time.

I give the residue (or _____ percent of the residue) of my estate to The DSU Foundation, a Mississippi non-profit corporation, 1003 West Sunflower Road, Cleveland, Mississippi 38732, to further the objectives and purposes of DSU (or specify the College, or a School, Division or Department at DSU).

6.      Are There Any Tax Savings With Such A Gift?

A gift to The DSU Foundation through a Will or living trust offers benefits to the donor in the form of advantageous tax treatment under both state and federal laws. It is possible for a donor to enjoy substantial transfer (estate and gift) tax savings.

7.      Are Other Planning Opportunities Available?

Bequests and gifts through living trusts are only two ways to make gifts to The DSU Foundation. Many other gift arrangements enable a donor to make a gift during the donor's life while retaining income from the asset. Each arrangement offers unique advantages, allowing donors to tailor their gifts to meet their unique personal financial and philanthropic goals.

8.      What are Some of DSU's Special Gift Arrangements?

The DSU Foundation offers a full range of planned gift opportunities. In addition to bequests and gifts through living trusts, these opportunities include charitable remainder trusts, charitable gift annuities, The DSU Foundation remainder interests in personal residences, and charitable lead trusts.

It is important to note that all of these planned gifts can be made during a donor's lifetime. They also can be made in a donor's Will or living trusts, and designed to take effect only after the donor's death.

Whether the gift is made during a donor's life, or on the donor's death, there are potential tax savings to be enjoyed. The appropriate arrangement for each donor varies according to the donor's age, the type of assets being used, and the donor's own financial needs and goals.

9.      How Do I Find Out More About Charitable Estate Planning?

To explore the opportunities and rewards of making a bequest to The DSU Foundation, please contact the Development Office. The staff can provide detailed information about The DSU Foundation's life-income gift arrangements, funding options, and endowments to support specific academic areas or University programs.

Planned giving staff work with each donor to create a distinctive gift that blends his or her financial land personal objectives with the priorities for DSU. The result is a gift that is both personally satisfying, and beneficial to the donor and to DSU.

 ALL DONORS MUST CONSULT WITH AND RELY EXCLUSIVELY ON THEIR OWN ATTORNEYS OR OTHER FINANCIAL ADVISORS FOR TAX AND LEGAL ADVICE.