If you’re like many folks, you’ve thought about leaving a gift via your estate to Lutherans For Life (and perhaps another ministry or two). However, the thought of having to redo your will (or even amend it) may be a bit scary when you consider the time, trouble, and cost.
What if you could leave a gift to LFL at no cost and with very little effort?
An easy way to do this is to leave a percentage of a savings account, tax deferred fund, or death benefit of a life insurance policy (such as Thrivent) to LFL (such as 10%, 25%, 100%, etc.). How is this done? Let’s look at an example using a Church Extension Fund (CEF) account:
Mary has a CEF account with $30,000 deposited, which she’s never had to draw from.
She’d like to leave 1/3 of what remains in the account to LFL after her death.
To do so, she calls the CEF and asks that she be sent a “change in beneficiary” form.
Once the form is received, Mary changes the beneficiaries to LFL for 33% with the rest going to her to family members and/or other ministries (example: remaining 33% to son Martin and 33% to daughter Kirsten). She then forwards the new form back to CEF.
Now, how long does all this take? The phone call, completing the form and mailing it back should take about fifteen minutes—at the most! Of course, in making this change, you will need the proper language to make sure your future gift goes to LFL. We suggest this:
“_____% to Lutherans For Life, 1101 5th Street, Nevada, Iowa; 515.382.2077; (EIN 41-1374293); to be used at the discretion of its board of directors in accordance with its mission.”
If your designation to LFL is less than 100 percent, then you will want to enter the percentage you wish to go to the other recipients and their location, etc. (e.g., family, other ministries or charities, etc.).
As an alternative to using a CEF account, leaving a percentage of a tax-deferred account (that is, via an IRA, 401k, 403b, tax deferred annuity, etc.) can be the best way to go tax wise. Why? Because if you leave what remains in this type of account to your children, they will have to pay ordinary income tax on what they receive. This is true whether payments are in a lump sum or “stretched out” over a period of years. If what remains is designated for LFL, however, the ministry will receive all proceeds because, as a charitable organization, LFL does not have to pay taxes. For example:
Mary* has a 401k account with $10,000. Other than the minimum annual distribution required by law, she has not had to withdraw any of the principal.
She’d like to leave 100% of what remains in the account to LFL after her death.
To do so, she calls the holder of the account and asks that she be sent a “change in beneficiary” form.
Once the form is received, Mary changes the beneficiary to LFL for 100% and sends the form in.
Since all of Mary’s remaining assets are not tax deferred (e.g., savings accounts, home, etc.), and (like most of us) her estate is not large enough to incur estate tax, 100 percent of everything else will go to her family tax-free.
Now, what if Mary has to tap into either her CEF account or 401k account while she is living? She is free to withdraw as much of the principal as she deems necessary. This will mean that LFL (or family or other ministries) will ultimately receive less, but since she designated using a percent, it will automatically be adjusted.
In short, leaving a beneficiary designation for LFL can be a quick way to ensure the ministry will continue to affirm life after you are called home to heaven.
If you any questions or would like more information on leaving an estate gift to LFL, please feel free to contact me at 512.468.9777 or via email at firstname.lastname@example.org.
Many thanks for your consideration.
Please note this article is not intended as legal or financial advice. For assistance in specific cases, you are encouraged to seek the advice of an attorney or other professional advisors.