A life reflected

Lutheran, The, Jul 2004 by Sevig, Julie B

SHARE YOUR FAITH, VALUES - AND WEALTH - WITH A WILL

In the next 20 years, trillions of dollars will be transferred from one generation to the next-called by financial analysts "history's largest transfer of wealth."

When Joan Kroc, a philanthropist who inherited the McDonald's fast-food fortune, left $1.5 billion to the Salvation Army, she was remembered as one who learned this from her husband, Ray: "I've never seen a Brinks truck following a hearse. You can't take it with you."

Kroc's gift was the largest one-time charitable donation in history, and when announced earlier this year it caused a Salvation Army spokesman to utter: "Excuse me, did you say 'billion'?"

Most of us won't inherit-or pass on to the next generation-the wealth of Joan Kroc, but we, too, would do well to remember Ray Kroc's observation.

Fortunately, the Krocs also knew the adage "Where there's a will, there's a way": a way to control what happens to your wealth-no matter how much or how meager. And a way to make a final statement about what's important to you-your faith and values.

In conversations about passing on all that you have, this question nearly leaps out of the mouths of the experts: Do you have a will?

And for good reason, says Keith Nelson, associate director for the ELCA Foundation and a gift planner for Nebraska and Arizona. "If you don't have a will, you risk having something happen that you don't want to happen. Without a will, your will will not be done."

Wills,trusts... I'm confused!

"A will is a gift to your family," Nelson says. "You have told them what you want. They don't have to wonder."

Kathryn Skelton, an attorney at Hoogendoorn and Talbot in Chicago and a member of Immanuel Lutheran Church, Evanston, Ill., explains: "It's a way of determining where your property will go when you die, as opposed to the state law determining where it will go."

It's your written direction of how assets are to be distributed at death: your home, personal belongings and investments. In your will, you may choose an executor; name a bank or trust to invest your estate; create trusts to support spouse, children and other organizations important to you; and avoid misunderstandings among your heirs regarding your wishes.

Some assets pass outside your will through beneficiary or survivorship designations: insurance policies, retirement plans, bank accounts, even real estate.

A will can be described as a safety net, catching assets that may-even through careful estate planning-have fallen through the cracks. A will catches and distributes assets that don't have a beneficiary named to them-personal property items as small as the teacups in your china cabinet or as large as a farmer's combine.

"A trust is a way of owning property in the name of a nominee that cannot die," Skelton says. Whether created through a will at death or through a separate document during life, money can be left in trust to care for a spouse or child, for instance. A distinction between a will and a trust is that a will becomes part of the public record when it enters the probate process. For the most part, a trust remains a private document.

"Apart from these benefits, a trust functions exactly like a will-it disposes of your assets at death," Skelton explains.

Add another child: Charity

If no will exists, a person has no chance for charitable giving, says Don Hallberg, executive director of the ELCA Foundation. "I ask people: 'How do you want to be known? How do you want to be remembered?'

"Many adult children are doing quite well, even better than their parents. Could they live on 90 percent of what you'll leave behind? Eighty percent?"

Hallberg suggests providing for children and adding another one called "charity."

"Perhaps you want to leave some to St. John by the Gas Station. Maybe Alice was active in Women of the ELCA and you want to leave some there. Or you've always supported the World Hunger Appeal and want some of your money to go there," he says.

That's exactly what LaVonne and Thomas Flach, members of Prince of Peace Lutheran Church, Schaumburg, Ill., thought when they contacted an attorney to draft their will. "Our kids are important to us, but we also want to leave something tangible to those who really need it and will appreciate it," explains LaVonne Flach.

The Flachs, in their early 50s, have three children aged 25, 26 and 28. "I don't think our kids would buy bigger homes or sports cars, but I have seen inheritances go that way," she says. "I think if we made sure our kids are educated, sent them to college so they're making good livings, maybe some of our money can provide immunizations or livestock for African villages."

Keep on top of it

Even if you do have a will, update it frequently. "It's a living, breathing instrument that's meant to be reviewed," says Laura Knitt, an associate director of the ELCA Foundation.

Good times to review wills and other estate planning documents are: when children are added to the family (naming a guardian and providing for them is essential), moving to a new state (laws differ), when receiving an inheritance or at retirement. "Your estate plan should be reviewed during any major life change or if you've gone 10 years without reviewing it," Knitt adds.