Estate Planning, Wills and Power of AttorneyLeaving a Legacy
Everyone faces the time when they leave this world and receive the rewards for their stewardship while they were here on earth. A good steward has been looking forward to that day with joy and anticipation. Sometime there is a nervousness about what God will say about the lack of diligence on our part but those who believe in Jesus will enjoy eternity with God and receive the crown of life. We will leave behind family members and friends which we had a chance to influence. How will that influence affect those who carry on from where we left off?
Even those who have not had the opportunity to have a children and a family still can have a significant ministry to those around them. They can be supportive of others and influence the next generation to godly living and to reach the world with the good news of the forgiveness of sin. We all can use the resources, time, talents and treasures for proclaiming the gospel. God wants us to use our gifts to further His kingdom and if we do, we will be blessed even more here on earth and then receive the reward of a faithful servant when we reach glory. What will be left behind?
The greatest legacy we could leave is family members who love the Lord and are serving Him with their time, talents and treasures. Paul encouraged Timothy to pass on that which was entrusted to him by God. (2 Timothy 2:2 And the things that thou hast heard of me among many witnesses, the same commit thou to faithful men, who shall be able to teach others also. )Teaching our Children
Will our children be spiritual or materialistic? We need to teach our children from young how to handle money. They will never learn finances at school.
Have them memorize scripture about finances - how to receive blessings, become wealthy and what true wealth is. The book of proverbs teaches a lot about finances.
We gave rewards to our kids for making their bed, brushing their teach, being kind to their brothers and friends, memorizing Bible verses, doing dishes and many other chores.
Instead of just giving children an allowance consider giving them direct guidance in the use of finances including how to work for money, family values and helping them to find ways in which to spend their money wisely. If you give small children a reward for helping in the home, give them small change instead of loonie and then teach them to share just like you are with them. Tell them that 10 cents belongs to God, 10 cents is for saving and the rest they can use for a special project.
Teach your children how to have "Delayed Gratification" through example. Delayed gratification is not purchasing something until all the money is collected and you can pay cash.
Develop a strong work ethic with your children. Link hard work with reward. Today's generation feels that parents owe them things. Teach them just as you have to work to provide for them, so they need to work if they want special privileges or to purchase special life needs (and a few toys.)
By having special family projects at Christmas or other times, teach your children the joy of helping others and the blessing that you receive as a result of giving. Have the children go with you to see the joy and happiness it brings to a family in need when you bring them a gift.Realize the temporalness of this life
We came in with nothing and will leave with nothing except what we have put into God's kingdom treasury. 1 Timothy 6:7 "For we brought nothing into the world, and we can take nothing out of it."
Make good use of what God has given you while you can. There may be extra that you have kept for plans for your later years that never materialize. Keep looking at your Net Worth and determine adjustments to your Resources plan every year.Consider making Funeral plans
Why not help those who are left behind by indicating your desires for your funeral. Most of us would not like to have a fuss over us but don't tell anyone that so loved ones not wanting to appear to be cheap or unloving will spend thousands on the funeral needlessly. Tell close family members who will be responsible should you pass away, what you have done and where you have put your funeral plans.
If you would like people to donate to an organization instead of flowers should put that into your funeral arrangements.Estate Planning
Trusts and Foundations are established to control funds and disperse at given rate to named causes and possibly future needs.
Foundations are created to disperse worldly goods even before you pass on. These are charitable organizations that others can contribute to for a purpose that you have which God has laid on your heart. A foundation is usually administered by a board of directors.
Trusts are funds that are given out usually after you pass on. Trust companies charge and this comes off of the total available to distribute. If both parents of underage children die, a trust is set up from the proceeds of the estate to care for the children.
Endowments are gifts to educational or artistic organizations to use the interest from the fund to give scholarships to deserving recipients.Wills
How many have a will? 80% of Americans do not have a will.
What Excuses do People Give Not to have a Will?
Why It is Important to have a Will
Work on the will together with your spouse. Talk over the needs of the family and what you think needs to be done with your finances after you go. Prepare for the worst and ask the Lord for mercy and a long life.
Make sure that there is only One will - It must be clearly dated, signed and witnessed by two people to be uncontested. Destroy all previous wills. Life changes like when our last child reaches the age of maturity (18) will make provisions for a guardian for our children unnecessary. That might be a time to make major changes to your will.
Small changes to a will can done with a Codicil - an Amendment which needs to be duly signed by witnesses that this is the express desire of the one writing the Will or Codicil.
Family Conference - Discuss with children about your possessions that are meaningful to them. Determine if anything that has special meaning or sentimental value. If two children would like your dining room furniture, it gives time to work out a deal between them. Spend time with your children so that you can pass on values not just things. Incorporate family wishes into your will.
Court challenges and Family Feuds are common for those who are selfish and bitter. The more you leave behind the greater the potential for problems. God rewards those who have proper attitude toward material windfalls.
Instructions to Trustee
It is good to sit down with the Trustee of your Will and explain what you wrote and why you wrote it. Make sure that you get the consent of the Trustee before you put that person as executor / executrix.
If you are giving to charity make sure that the charity exists and if not make sure that the Trustee understands your heart desire so that he / she can execute the Will effectively.
Timing of the disbursement. Most trustees want to get the job done quickly. Make it easy for him / her by keeping your will simple and clear. Have a document which states all your bank accounts, safety deposit boxes, investments and where they are at. The older you become the better it is to downsize and liquidate your investments and invest in simpler forms of savings. Real estate, investments in stocks and bonds and businesses become complicated to divest for the trustee.
The estate will pay the trustee for his/her time to do the work and at $20 or more an hour so don't make your complicated. Trust companies charge between 4% and 10% to execute a will.
Divest yourself of your things so there is not so much to clean up after. Become a minimalist.
Before you pass on find ways to maximize the amount given out to the organizations and people closest to your heart. Do you want to support your church, schools, missions that you like but wish you could give more to. Work on minimizing tax that is paid and maximize your giving and thus be a great steward.
One of our local Credit Unions has some free consultation available for trustees who are not sure how to proceed if you have an account with them. Trust companies have people who will execute the will for a fee depending on the size of the estate and the complexity.
Consider gift giving to children while you are alive - currently there is no gift tax in Canada but gifts larger than $10,000 at one time will be questioned by the bank and Canadian government. If you are in nursing care and would require government assistance to pay your bills the government can ask the recipients to pay the nursing care bills. There could even be a clawback for up to 3 years prior if the government thought that gifts were given to children or others so that a person in nursing care would receive more government assistance. If you have a large estate, reducing the estate reduces taxes paid by the estate when you die.
How much do you leave to immediate family? That is an individual's challenge.
Proverbs 13:22 A good person leaves an inheritance for their children's children, but a sinner's wealth is stored up for the righteous.
Why do you want to give a large inheritance to your children? What is your motivation? Do you want your family name to go on and your kids to be wealthy?
Some people are driven to success and want to prove other wrong. They have a personal vendetta with other relatives - "They said I would never amount to much. I will prove them wrong. My kids will be rich, theirs will be poor."
Dr. William Mayo founder of the Mayo Clinic - wrote, " I wouldn't have my children deprived of the fun and benefit of wanting something and going out to fight for it."
Andrew Carnegie - "The Almighty dollar bequeathed to children is an almighty curse. No man has the right to handicap his son with such a burden as great wealth." Stewardship Kauffman p.149
How old are your children? If they are under age make provision for a guardian and a trust fund until your children are 18 in your will in the event that you and your wife die within 30 days of each other.
Consider leaving more for younger children and less for older children because you have already made that investment into their life. You could explain the reasoning so that children don't think you are playing favorites. Be sure your children over 18 recognize that they already have receive significant support before your death.
Are all your children over 18? Are there any special circumstances or handicaps? Also the spouses and children of predeceased children should be considered as your descendants and treated in the same way as if your child were still alive.
Each person has to decide whether to give to grand children, or great grandchildren and how much.
Unless you owe a debt of gratitude to extended relatives, like a relative that has helped you in a very special way, it is not necessary to be generous to them in your will. Unless others recognize the special bond and help that existed, your generosity to them could be misunderstood and cause division in your family after you die. If possible do these kind of tributes while you are alive.
Others - People who you were unable to reward in your lifetime but you want to show that you appreciated their help. Spiritual Mentors, Schools, Others with significant needs that you want to help after your passing.
How much do you give to charity in your Will? - Use a percentage of the estate and not a fixed amount. Often our allegiances change over time so if an organization no longer exists or you do not want to give to that group when you die, change your will. You can also will Gifts in Kind like real estate, stocks and bonds, buildings, etc. can be donated to charitable organizations.
Which organization(s) do you want to name in your Will? How much to each (best to designate a percentage of the estate), what kind of project do you want the money to go to - general fund, mission or project support, evangelism, Evangelism, social justice, church project, distribution of God's word, Missionaries or a mission field, Parachurch ministries, etc. What burdens has God laid on your heart? People often leave a legacy with the final gift of giving in their Will.
Be careful not to attach too many strings as it may just sit in a bank because the organization can't use it for what you have designated.
You can leave verbal legacies as well as financial ones. Blessings to different people.
Some people want to leave their business as their legacy and put a burden on their children that destroys them or the business. Some children don't have the interest or skills to run the "dad's" business. (Roofing company - children scared of heights.) Leon Danco wrote a book about transferring a business - Inside the Family Business and Beyond Survival: A Guide for the Business Owner and His Family.
If you have a business you should have an exit game plan in place not just leave it in your Will to them. As you move to retirement, move to advisor not controller of your business. Give new leaders (children) some opportunity to fail or make it bigger. Mistakes might hurt you but allow your legacy to live on not in business but in people.
Power of Attorney
If you become mentally incapacitated what will happen to you? If you were in an accident and went into a comma who would make decisions for you? Most people would think that the spouse would make decisions but what if your spouse was injured as well? Often the state will assign someone to make decisions - medical or financial for you. They may or may not be in line with what you would want to do.
When people write up their own power of attorney documents usually a family member is chosen for these positions. These "Power of Attorney" papers can be written up by a lawyer and signed. Help is available in Ontario on the web at http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/poa.pdf. Each province has its own regulations and forms.
As we get older ( 30+) we should have a power of Attorney for our personal care or medical decisions. Things like would you like to be resuscitated should you have a heart attack, continue on life support, harvesting of organs, etc.
We should also have a Power of Attorney for our property and finances to help take care of personal business if we cannot.