About a month ago I was invited to speak at a Christian women’s conference in Colorado Springs. I had been asked to speak for about an hour on estate planning basics. Unfortunately, the day before my scheduled appearance I was notified that the estate planning session had been cancelled. In preparing my remarks I had planned to briefly recall a speech that I had given a couple of years ago entitled “Sojourner’s Jewels.” Sojourner Truth was born Isabella Baumfree in 1797. As she grew increasingly weary of being a slave she asked God how to be free. He told her to rise early in the morning and just start walking. She did as instructed and eventually found herself in a wilderness wondering what to do next. She almost recanted the faithless cry of the children of Israel who likewise found themselves in a wilderness wondering if God knew what he was doing. Believing that God would not abandon her, Sojourner asked God, “what now?” to which He responded just keep walking until you come upon a house. She did, and eventually Sojourner became a free woman. Some years later Isabella Baumfree changed her name to Sojourner Truth, a name that defined her status and her mission in this realm. I had planned to discuss how Harriet Beecher Stowe, the author of Uncle Tom’s Cabin, had met Sojourner in the early 1800s. Harriet introduced her husband to Sojourner and described him as a “great preacher.” The reverend Stowe then asked Sojourner if she preached from the Bible to which Sojourner replied “no, I can’t read it.” He then asked her what she preached about to which Sojourner responded, “I preach on the topic of “when I found Jesus.” After briefly reviewing Sojourner’s life, I then asked the audience to identify what they would consider to be Sojourner’s jewels, that is, her treasures, versus the jewels of us modern day women.
Estate planning is a fancy word for acquiring, preserving and increasing “wealth” in this realm and making plans for its transfer to others during our lifetime or upon our death. Estate planning requires deliberate and voluntary action or the result will be estate planning by default, not unlike the factory setting on our computers and not unlike God’s plan of salvation. Unless we deliberately change factory installed setting on our computers we get what’s programmed in. Likewise, unless we deliberately opt out of the “factory default setting” that all of mankind inherited from Adam and Eve, we will get what Adam and Eve’s disobedience programmed in. I was 32 and practicing law before I came to realize that I had been born in the “default mode” and that I needed to deliberately opt out of this “factory setting.” I came to understand that my love of my house and my fancy car were, at the time, obstacles to my salvation. For me personally, there came a time after God had told me over and over, “I need to talk to you and you need to listen,” that I accepted Jesus Christ as my personal Savior and received the free gift of the Holy Spirit. It did not come easy. I did everything to avoid “hearing” the truth. I ran to the Virgin Islands and as soon as I settled in, a young man came into my office talking about Jesus. I told him to explain how there could be a God given all the unredressed injustices in the world.. He had no satisfactory answer, but he told me that I needed a personal savior. I asked why and soon moved to Washington, D. C. There I continued my usual single life, in effect telling God to, “Talk to me later.” To make a long story short, within a few months, and somewhere between the garage and an alley behind my house, I invited Jesus Christ to come into my life and save me. He did and my reaction at the instant of being born-again and filled with the Holy Spirit was to run up all around the house crying, “You Devil, I got away, you didn’t get me, I got away”
As a Christian I now view estate planning from two vantage points—leaving, and leaving stuff behind. Of all the stuff that we own in this realm, including ourselves, God views us as the most important “stuff.” As such, he wants us to get our estate planning priorities in order by addressing the most important question, and this is, “Where am I going when I leave here?” Never mind the stuff that we most assuredly cannot take with us, we are God’s most precious possession, and above all, he wants us to make the necessary “final” plans to “come home.”
Estate planning can include an array of vehicles to effectuate a transfer of wealth, both during our lifetime and after we die. Wills, trusts, or a combination of both, joint tenancies and inter vivos (during life) transfers can be used to transfer what we own. Wills are instruments that express our wishes for the transfer of our possession after we die. Wills must meet certain basic requirement-- be in writing, by someone over 18 who is of sound mind and meet witnessing requirements. Wills must be probated, that is proved in court and administered, requiring either full or minimal court supervision. Trusts, more and more, are being used as instruments to preserver and effectuate the transfer of wealth. A trust is an arrangement whereby property is transferred and actually owned by the trust and administered by a trustee. The person who sets up the trust is called the Trustor, Grantor or Settlor. Beneficiaries are those who are to receive the assets transferred into the trust. A trust can be created in a will, sometimes called a testamentary trust or “pop-up” trust. In recent years trusts have been promoted and even aggressively marketed as a way of avoiding probate and its attendant costs and to save on estate taxes. A trust may or may not accomplish these objectives depending on the particular facts. Trusts can be complicated and should be thoroughly discussed with a lawyer or other financial advisor. There is a wide array of trust arrangements designed to accomplish a variety of purposes. There are Living Trusts also called Revocable Trusts, there are Irrevocable Trusts, sometimes associated with large insurance benefits that can remove large insurance benefits from an estate. Historically trusts have been used by the wealthy to protect their estates from unnecessary estate taxes. Some of these trusts have complicated names such as Unified Credit Shelter Trust or ByPass Trust, Qualified Interest and Qualified Terminable Interest Trust, Charitable Lead, Charitable Remainder and Charitable Remainder Annuity Trusts. The Economic Growth and Tax Relief Reconciliation Act, signed into law by President Bush will substantially affect both estate and gift taxes through the year 2009. For those of more modest means, especially those who might one day require long term nursing home care, the Miller Income Trust and the Special Needs Trust are options for meeting Medicaid income guidelines.
Planning for the transfer of one’s wealth can include a variety of gift-giving options. What is significant is that there are limitations on how much a person can give away and to whom it can be given without incurring potential gift tax liabilities. The Tax Relief Act also makes changes that substantially affect gifts taxes. Suffice it to say that the advice that Jesus gave to the rich young ruler in Matthew 19: 21 to sell all and give to the poor incur serious tax consequences today.
Any discussion of estate planning would not be complete without considering various “right to die” or advance directives. A Living Will –Directive to Physicians is a written document telling doctors in so many words not to use artificial life sustaining measures. A Durable Power of Attorney and a Durable Power of Attorney for Healthcare are advance directives appointing someone to make healthcare and other decisions in case of incapacity. (It is called a “durable’ power of attorney because, unlike a general power of attorney, a durable power of attorney “endures” during the period of incapacity.) A “Do Not Resuscitate” (DNR) directs medical providers not to use artificial measures and a “No CPR,” tells paramedics who might respond to you at home not to use artificial means to revive you. Since 1992, Colorado, and probably other states as well, has a “Proxy Decision Maker” law that kicks in where there is no living will or other advanced directives that empowers family members to agree among themselves and appoint a “stand-in” to make medical decision by proxy. Understanding conservatorship and guardianship alternatives are also useful for those who might potentially become caregivers. The newly emerging field of professional “care managers” who assist in exploring available resources for those who need long and short-term care is an important alternative to understand. Understanding pre-need and preplanned burial options are also important given the increasing cost of funerals. Since September 2003 Colorado has an advance directive Declaration of Disposition of Last Remains Law that allows a person to specify burial and cremation wishes. One additional law, which can adversely affect one’s estate, is worth knowing about. The Medicaid Estate Recovery law mandates that states file a lien against the real estate or enter an estate as a creditor to recover sums paid by Medicaid for nursing home care. With ever shrinking state budgets the use of this federal provision might become increasingly invoked with serious estate planning implications.
In sum, estate planning allows a person to begin to inventory and assess his or her assets, and liabilities, and to plan for their lifetime or after death transfer in order to accomplish the following; 1) to specifically identify beneficiaries, 2) to effectuate a wealth transfer in the most expedient manner feasible and 3) to do so with the least potential for estate reducing taxes. In considering any estate plan one should seek out qualified and trustworthy professionals be they lawyers or financial planners. Be prepared to ask questions before embarking upon any plan.
The life the Elijah, one of God’s most anointed prophets, provides us with a rich
and powerful lesson about final plans after our “sojourn” in this realm. On the day of his departure from this life Elijah’s protégé Elisha followed him around all day trying to hold back that moment of ultimate departure. When it finally happened, Elijah shed his mantle, his outer clothing, and left this arena of life. Elisha’s prayer for a double portion of Elijah’s anointing leaves us with a far wiser alternative to “mere” plans for the passing on of “our stuff.” Would not the world become a better place if our beneficiaries were as eager to receive spiritual assets as they are to receive cars, houses, and bank accounts? Would not the world be a better place if men and women, as a part of their estate planning, passed on some of the wonderful fruits of the Spirit--love, joy, peace, longsuffering, gentleness, goodness, faith? Passing on these spiritual assets should be a basic part of Christian estate planning.