Getting Started with Planned Gifts and Bequests

Questions and Answers – By Shep Erhart

Hi, my name is Shep Erhart, and as a long term Sant Bani School Board member, past parent and past Development Committee Chair, I would like to offer you advice on making a bequest to the School.

Perhaps you feel, as I do, a desire to do more than give that annual gift (very important as these annual gifts add up and are crucial!), but there seems to be little available in the checkbook for current giving. Don’t despair. There still is a way, several ways in fact, you can contribute to the long term health of this extraordinary school.

Naming the Sant Bani School as a beneficiary in your will is an excellent way to help. Bequests, or any other form of future (planned) gifts, cost you nothing now, are relatively easy to set up and may even provide a tax benefits now or later. More important, they become the foundation of the school’s endowment fund, essential for financial stability over time. To encourage you to explore these “future” giving options, I’ve anticipated some of your questions, followed with some simple answers.

Kent Bicknell or Megan Farkas in the Development office are the people to notify and possibly the people to ask some preliminary, non-technical questions of. Or if you want to touch base with me on anything really simple, or need some hand holding, try me at shep@seaveg.com or (207) 565-2907. If we don’t know the answers, we’ll try to direct you to someone who does.

Thanks for joining me in this effort; let’s ensure that this school keeps serving wonderful students well into the future.

Sincerely,

Shep Erhart

Q & A

Q. I don’t have a will yet and am not sure how to proceed.

A. Ask a close friend or family member who has been through the process for support or guidance. Having made it over the hump, they are usually keen to help. You’ll need a lawyer to draft a legally acceptable will.

Q. How do I go about finding a lawyer?

A. Personal recommendations from friends or family are the best place to start. Your state Bar Association also has a referral service, as does AARP. Ask for a short exploratory appointment if you’re not sure who might meet your needs.

Q. Do I need a special lawyer?

A. Simple bequests ( I leave SBS $1000, etc.) can be handled by any lawyer familiar with wills. More complicated bequests (Unitrusts, Life Estates, etc.) usually require lawyers with estate planning skills and may require the service of an accountant and /or financial planner. “Estate Planners,” who are not attorneys, might be somewhat helpful but are primarily in the business of selling insurance and annuity products.

Q. I’d feel more comfortable if I could speak with someone who knows the school well. Who can I talk to?

A. While it would not be appropriate for anyone at the school to advise you directly, there is a small pool of professionals, associated with the school, who are available for consultation at no charge. You will still need to work with an attorney in your home state, but these people can suggest which documents would be appropriate for you, and can even provide a “second opinion” on those documents when they’re completed. The Development Office has more information, if you’re interested.

Q. Can I simply leave a percentage of my estate to the school?

A. Certainly. Just make sure your lawyer clearly states your desire in your will.

Q. Can I leave something to the school without disinheriting my children or heirs?

A. Yes, there are ways of replacing the value of what SBS receives with a life insurance policy benefiting your heirs. Talk to your estate attorney on this one. You can also leave a “specific bequest” to SBS with a specified dollar amount or percent and leave the balance to your children.

Q. Can I designate SBS the beneficiary of a life insurance policy, my IRA or other retirement account?

A. Yes, this is a very simple way of helping the school, but may not have the tax advantages of other means of bequests or planned giving. Check with an accountant first.

Q. Can I give personal property to the school and still maintain the use of it and/or the income from it until I die?

A. Believe it or not, there are several ways to have your cake and eat it too! And may even get an immediate tax benefit. Youll definitely need an estate attorney for these kinds of arrangements. Gifts may include securities, real estate, antiques, collectibles, even the house you live in. If you leave something like this car (it’s just visiting SBS), don’t forget that some gifts may require maintenance funds.

Q. I inherited/expect to inherit some highly appreciated, low yielding securities that I do not want to sell because of high capital gains taxes. Could I give these to SBS now without losing the income, still get a tax break and benefit the school?

A. Definitely. And because the school is a non-profit, it can sell without paying capital gains and reinvest in higher yielding securities to boost your income until your death. Then the school retains ownership, and your taxable estate is that much less for your beneficiaries. Everybody gains. Talk to your estate attorney about this one too.

Q. Should I notify the school of my plans?

A. If you are comfortable with it, please do. Even though we may not be able count on the timing or exact amount of individual bequests, it is very helpful for long term planning to project the possible impact of numerous bequests. Also foundations that we are soliciting often want to hear of our planned giving/bequest program. And just knowing of your future intentions is very supportive here and now.