Some 60% of Americans die without a valid will. This is unfortunate in most cases, because state laws will take over and will distribute your probate estate in accordance to a prescribed formula — possibly in ways that you would not choose. Any charitable interests you wanted to benefit will not occur.

One thing is certain as we go through life and that is change.

The circumstances of life change constantly. If you have taken steps to write a will, you can be certain that your circumstance and the makeup of your estate will change from time to time. It is important that you do not procrastinate to get your will amended or even rewritten as these changes in life occur. Here are some common events that should nudge you to change your will: marriage, divorce, a new baby, stepchildren, named heirs pass away, you move from a common-law property state to a community-law property state or vice versa, you dispose of or purchase significant assets, guardianship is no longer needed for your adult children, you change your mind about your bequests to heirs, you wish to add or change a charitable beneficiary.

Consider revising your will using a codicil or contacting your financial advisor.

Some states allow an individual to compose a will. If it is properly witnessed and signed, many Probate Courts will accept such a will.

However, most people have no idea how to get started with such a task. They wonder if they will adequately cover all the bases in a self-authored document.

A will is a very important legal document, and it is wise to employ the expertise of a qualified attorney. A will is one of the least expensive legal documents you would pay for, but a well-written document could save your heirs much more in dollars and hassle.

An executor or personal representative is the person you assign the responsibility to manage and distribute your estate in accordance with your will. An executor’s work will be monitored by the Probate Court. An executor does not need to be an expert in finances, probate law, or taxes. He or she can and should hire such experts that are needed for assistance. A good executor will be honest and organized, possess good common sense, and be willing to serve in this capacity. Most people will name their spouse or an adult child, or some other close heir. If possible, name someone who lives nearby and who is familiar with your financial matters. That will make it easier for the person to do chores like collecting mail, selling assets, and finding important records and papers.

This is the court that determines the validity of a will and provides judicial oversight over the distribution of the estate. If there is no valid will, then the Probate Court will appoint an administrator of the estate to facilitate the estate’s distribution in accordance with state law.

Non-probate assets are any assets in your estate that will pass to heirs outside of the Probate Court. Examples include jointly held property such as real estate, jointly held bank accounts, and assets that will pass to heirs based on a death benefit beneficiary designation that are prestated in a life insurance policy or qualified retirement plan (such as an IRA).

Additionally, some people title all their property to a living trust, and at death, the named trustee will distribute or manage assets in accordance with the trust document. The trust and assets possessed by the trust are not reviewed by the Probate Court. In states where probate fees are expensive, a living trust can save on those costs. Also, those who own property in another state may want to consider a living trust so that they do not have to deal with two Probate Courts. 

This is a simple amendment to a will, which avoids the cost and complication of rewriting an entire will. The codicil must be signed and witnessed or notarized as is the original will.

Download a sample codicilOpens new window.

Simply contact your IRA or retirement plan administrator and request a copy of the Change of Beneficiary Form. You can fill this in as you wish and include Rockhurst University for a portion or all of the remainder of your plan’s assets.

For gifts at death, any portion of your retirement plan assets that are given to a qualified charity will also qualify for income tax, inheritance tax, and federal and state estate tax deductions as applicable to the size of your estate and your state of domicile. Any assets coming out of your plan to your heirs may be subject to all of the taxes mentioned above.

It is important that you contact us so that we can assist you with transfer instructions. If you own securities in a brokerage account, we can help you set up an electronic transfer of the shares to our brokerage account. If you possess actual stock certificates, we can tell you how to sign the certificates over to us and fill out a stock power form.

Assuming you are giving long-term (owned for 12 months or more) appreciated securities, you will receive a charitable income tax deduction equal to the fair market value of the shares. For common stock this is typically the mean value on the date that we take control of the shares you give. You will pay no capital gains tax. Gifts of stocks are deductible up to 30% of your adjusted gross income the year you make your gift. Any excess amount can be rolled over into the next tax year, for up to five additional tax years if needed.

It is generally our policy to liquidate any donated stock shares immediately after receiving them, so that we can use the cash proceeds to support the overall mission of Rockhurst University.

In many cases yes, and considerable tax benefits can result. However, giving closely held stock is more complicated than giving publicly traded securities and may be subject to certain transfer restrictions. We stand ready to assist you with your gift intention. One prerequisite to our acceptance of a gift of closely held stock is that the business or the shares have had a recent qualified appraisal. Please contact us so that we can walk you through the process.

Simply contact your life insurance company and request a Change of Beneficiary/Ownership Form. Designate us as the new owner and beneficiary of your policy.

If you give your policy to us while you are still alive, you will receive an immediate income tax deduction for the current value of the policy. In order for you to get this deduction when the charity is the policy owner, you make donations to Rockhurst University so we have funds to pay the insurance premiums. Put another way, the donor covers the premium payments that the charity now makes on the gifted policy by making regular additional monetary gifts to the charity. If you retain ownership of the policy, benefits payable to us at death can save you federal and state estate taxes depending on the size of your estate and your state of domicile.

Here are some questions we will need to answer to determine if your property will be helpful to us:

• Is the property void of any liens?
• Are there any environmental concerns with the property?
• Can our charity actually use the property for our work?
• Is the property marketable and salable within a reasonable period of time?
• What are the costs associated with accepting and holding the property?
• Can we realize a positive net return on this property?

You will receive an income tax deduction equal to the appraised fair market value of the property. An independent qualified appraisal is required for this purpose and it is up to the donor to acquire such an appraisal. Donating your property may also reduce your estate costs and taxes as well.

The key question to determine is whether or not your donation has a legitimate use related to the charitable mission of our organization. For example a gift of art work or a stamp collection can enhance an educational purpose; a gift of a piano or other musical instrument can enhance a musical program; a gift of kitchen equipment can enhance a feeding program, etc. If your gift is related to our charitable work then your income tax deduction is based on the fair market value of the property. For gifts of property with a value of $5,000 or more, an independent qualified appraisal of the property is required by the IRS.

If your gift of personal property has no relation to our charitable work, then your tax deduction is limited to your cost basis in the property. We suggest that you acquire IRS publications 526 and 561 to review all the comprehensive information available for gifts of personal property.

Try our gift calculator! It's fun and educational.

A gift annuity contract becomes a legal financial obligation of Rockhurst University and is backed up by all our assets.

Both have distinct advantages. A gift of cash will produce a larger tax-free portion of the annuity. A gift of stock can increase your income because of reduced capital gains cost. Both assets produce an equal annuity rate and charitable income tax deduction.

A charitable gift annuity can only be set up for one or two lives. This is typically a husband and wife, but it could be two siblings, or two friends, etc. Beneficiaries must be at least 65 at the time of the gift.

A commercial annuity, typically sold by banks and life insurance companies, will provide the owner with fixed or variable income based on commercial rates of return. These plans establish their annuity payments based on the assumption that all of the assets in the plan will be used up by the end of the income beneficiaries' lives.

A charitable gift annuity is part guaranteed annuity and part charitable contribution. The donor receives a partial income tax deduction based on the assumed value of the portion of the gift the charity will ultimately receive. A gift annuity establishes its payments on the assumption that there will be something left for the charity at the end of the contract. Often annuity rates for gift annuities cannot compete with the annuity rates of a commercial annuity because of the charitable component in the contracts. But then, there are fewer tax benefits with a commercial annuity.

The mortgage or lien can and should be paid off prior to the bargain sale or with the sale proceeds received by the previous owner. This produces the best tax benefit to the donor/seller. If the charity assumes the lien or mortgage, then this is considered taxable income to the donor/seller.

Assuming there are net sale proceeds to the donor/seller, these proceeds can be used to establish a charitable gift annuity. Or the gift portion of the bargain sale can be used for a gift annuity contract. For example, a donor arranges a bargain sale of real estate with Rockhurst University for the sale price of $100,000. The property has an appraised market value of $200,000 thus making this arrangement a bargain sale of $100,000 and a charitable gift of $100,000. The donor can turn around and donate the sale proceeds ($100,000) received in this deal for a charitable gift annuity. This produces the maximum tax benefits for the donor. On the other hand, the charity can agree to a charitable gift annuity contract based on the donated portion ($100,000) of the bargain sale.

When you enter into a bargain sale you receive an immediate infusion of cash from us. This may help bridge the gap between residence sale and purchase of a new residence, or other immediate needs for cash while a sale of your appreciated property is pending.

Yes, in fact, we may also choose to conduct an appraisal for our due diligence purposes, but part of a bargain sale is asking you to choose a qualified appraiser to evaluate the market value of your property. A qualified appraiser not only helps both of us determine your fair market value, but is required by the IRS when you file for a deduction from the bargain sale transaction.

If you negotiate a provision in the Retained Life Estate contract for the right to lease the property for the remainder of your life estate, you can keep the additional money. You remain responsible for the taxes, insurance, and maintenance expenses spelled out in the agreement with the charity.

You are. Most likely the RLE contract will contain a provision that requires you to get prior approval from the charity to make such improvements.

Yes. The use of the asset is yours. Should you decide to lease for a while and then move back in, this gifting concept allows for that.

Yes. As long as the property qualifies under the IRS rules, it can be used to create this type of donation arrangement (i.e., you don't take depreciation or own it in a corporate structure, etc.) Check with your accountant to make sure it qualifies. Motor coaches and yachts qualify as second homes.