Leaving money as a legacy after death

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
huy178
Posts: 57
Joined: Mon Jan 19, 2015 12:43 pm

Leaving money as a legacy after death

Post by huy178 »

Fairly young, 50 widower I want to make sure my financial house is in order when I die, I have 3 siblings who will get almost everything. Its is a decent amount plus I have about 750K in life insurance.
I plan to set aside a portion of money to donate to some sort of charity, have no idea what.
Siblings are older then me so I am actually thinking about when they are gone.
Say my estate is 2M, can I set something up that says 500K goes to charity x at my time of death, balance goes to siblings to use as they wish but when last one dies balance goes to charity?

Thanks
Last edited by huy178 on Fri Jul 15, 2016 1:43 pm, edited 1 time in total.
NMJack
Posts: 836
Joined: Sun Feb 14, 2016 12:22 pm

Re: Leaving money as a legacy after death

Post by NMJack »

The easiest and perhaps most reliable way to accomplish the immediate gift is to put those funds in a separate account now and name the charity as primary beneficiary. Not sure if that would negatively impact any tax deduction that could be claimed by your estate. The delayed gifts would require a trust, which will require more effort and thought.
User avatar
N1CKV
Posts: 864
Joined: Wed Mar 21, 2012 8:18 am

Re: Leaving money as a legacy after death

Post by N1CKV »

Why do you have 750K in life insurance if you have no dependents?
Topic Author
huy178
Posts: 57
Joined: Mon Jan 19, 2015 12:43 pm

Re: Leaving money as a legacy after death

Post by huy178 »

I had policies before wife died. Just keeping to give a portion to charity.
mac808
Posts: 522
Joined: Mon Sep 19, 2011 8:45 pm

Re: Leaving money as a legacy after death

Post by mac808 »

I've worked with a lot of charities and many of them are scams. Even some of the best run are really just lifestyle businesses for the managers who take over. I encourage folks to find the decent people in their lives and help them out directly.
Topic Author
huy178
Posts: 57
Joined: Mon Jan 19, 2015 12:43 pm

Re: Leaving money as a legacy after death

Post by huy178 »

Mac, I agree with you 100%. I would want that money to make a difference, 500K in the right hands thrown at a certain cause could make an impact.

500K given to a major cancer charity, I am not sure how much good it would do.

Determining where to disperse is something I have to give a lot of thought.
Chadnudj
Posts: 1269
Joined: Tue Oct 29, 2013 11:22 am

Re: Leaving money as a legacy after death

Post by Chadnudj »

huy178 wrote:Fairly young, 50 widower I want to make sure my financial house is in order when I die, I have 3 siblings who will get almost everything. Its is a decent amount plus I have about 750K in life insurance.
I plan to set aside a portion of money to donate to some sort of charity, have no idea what.
Siblings are older then me so I am actually thinking about when they are gone.
Say my estate is 2M, can I set something up that says 500K goes to charity x at my time of death, balance goes to siblings to use as they wish but when last one dies balance goes to charity?

Thanks
The answer to your question is yes. You will have to talk to (and pay) an experienced trusts and estates attorney, but they should be able to set up a trust that could be used to benefit your siblings while they remain alive, and then if there is a remainder, the balance goes to the charity.

If you know you're going to leave X amount to charity, I would encourage you to think about/talk with an accountant and the attorney about the tax implications of setting up a charitable trust -- there's some info on the wiki about it, I believe. Could help you in terms of tax savings/RMDs when you turn 70.5.

As for the charity, there are many groups that look at the effectiveness of charities/how much they spend directly on their goals vs. how much on overhead, etc. (Google "effective altruism" or go to effectivealtriusim.org or givewell.org to find report cards on places where your money can make the most difference based on certain metrics). These can certainly help identify good charities that are spending everything/most of everything on direct help, and those that are (relative) scams.
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Leaving money as a legacy after death

Post by dm200 »

It was my late father's intention to leave a not insignificant amount in his will to a religious based entity/charity. Can't recall the specifics, but something like, say, "25% of the value of his estate". The attorney who was drafting his will suggested that he not do this because the "less than charitable" clergy running that organization could stick their fingers into every aspect of the settling of the estate, possibly delaying the settlement, slowing it down and leading to more expense. The attorney suggested, and my father carried it out, for him to make such a significant donation while he was still alive.

A Donor Advised Fund can be set up, with successors, to parcel out money over an extended period of time. It can be added to by terms of your will as well. Speak with several relatives or other trusted person(s) about taking this over upon your passing and make contributions according to your ideas and preferences.

In my opinion and experience, many fine religious and charitable organizations are not at all good with getting a large, one time donation and using it "prudently" over time. A donor advised fund allows a big chunk to be donated to charity (the DAF is the charity) and then funds can be directed to the organization/charity on a regular basis and frequency.
boglephreak
Posts: 441
Joined: Fri Apr 22, 2016 5:16 pm

Re: Leaving money as a legacy after death

Post by boglephreak »

do none of you have kids? my wife and i have no kids and we are planning on putting our nephews and nieces as the beneficiaries of our estate. if there are no kids then charity seems the right way to go. make sure you get your affairs in order though, or the gov't may be your beneficiary.
Topic Author
huy178
Posts: 57
Joined: Mon Jan 19, 2015 12:43 pm

Re: Leaving money as a legacy after death

Post by huy178 »

Do have some other relatives other then 3 siblings, due to reasons I don't want to get into they may very well be cut out of will.

I'm too young to make any donation right now, a trust sounds like the way to carry out my wishes.
Topic Author
huy178
Posts: 57
Joined: Mon Jan 19, 2015 12:43 pm

Re: Leaving money as a legacy after death

Post by huy178 »

Do have some other relatives other then 3 siblings no children of ours, due to reasons I don't want to get into they may very well be cut out of will.

I'm too young to make any donation right now, a trust sounds like the way to carry out my wishes.

Currently I have siblings as equal beneficiaries and have a will regarding other assets.
lhl12
Posts: 728
Joined: Mon May 27, 2013 8:24 am

Re: Leaving money as a legacy after death

Post by lhl12 »

A trust is the way to carry out your wishes, but the trust doesn't need to be created until your death, as part of your Will.

Your estate planning attorney would draft the terms of that trust now, including specifying how much of your estate went into that trust and how much went elsewhere.

Then, after your death, the trust would be funded and managed until it was wound down - presumably at the death of the last to die of all your siblings. During your siblings' lifetimes the trust could disburse funds to your siblings as specified by the trust, with the remaining trust assets to go to the charity (or charities) of your choice when your final sibling dies.

This would allow you to keep all your assets in your name and under your control during your lifetime. You are young, and while I'm sure your wife's death was a terrible event for you, who knows? You might find someone else in time. You would want to be sure you have maximum financial flexibility for that possible scenario.
Swansea
Posts: 1533
Joined: Sat Feb 13, 2016 4:16 am

Re: Leaving money as a legacy after death

Post by Swansea »

huy178 wrote:Do have some other relatives other then 3 siblings no children of ours, due to reasons I don't want to get into they may very well be cut out of will.

I'm too young to make any donation right now, a trust sounds like the way to carry out my wishes.

Currently I have siblings as equal beneficiaries and have a will regarding other assets.
You may wish to consider a donor advised fund. I am in the process of setting one up, with a modest amount of monies to start. I will then leave Transfer on Death (TOD) instructions to my financial accounts to move the monies upon my death to the fund. This way I can spend whatever I need on my care, but leave the remainder. Since two of the groups I support now are small, I am designating successors to the fund who will dispense the monies over a period of years so long as the groups are using it wisely. The successors and I have all spent many hundreds of hours volunteering with the non-profit.
Gnirk
Posts: 1740
Joined: Sun Sep 09, 2012 3:11 am
Location: South Puget Sound

Re: Leaving money as a legacy after death

Post by Gnirk »

dm200 wrote:It was my late father's intention to leave a not insignificant amount in his will to a religious based entity/charity. Can't recall the specifics, but something like, say, "25% of the value of his estate". The attorney who was drafting his will suggested that he not do this because the "less than charitable" clergy running that organization could stick their fingers into every aspect of the settling of the estate, possibly delaying the settlement, slowing it down and leading to more expense. The attorney suggested, and my father carried it out, for him to make such a significant donation while he was still alive.

A Donor Advised Fund can be set up, with successors, to parcel out money over an extended period of time. It can be added to by terms of your will as well. Speak with several relatives or other trusted person(s) about taking this over upon your passing and make contributions according to your ideas and preferences.

In my opinion and experience, many fine religious and charitable organizations are not at all good with getting a large, one time donation and using it "prudently" over time. A donor advised fund allows a big chunk to be donated to charity (the DAF is the charity) and then funds can be directed to the organization/charity on a regular basis and frequency.
This happened to a friend of mine who was the executor of the decedent's estate. The clergy sued to get their "cut" before tax and estate expenses were paid, held up the settlement of the estate, and ultimately lost in court, and had to settle for their share AFTER estate expenses and taxes were paid. It created unnecessary stress for the executor and the other beneficiaries of the estate, as well as added expenses.
Flora
Posts: 196
Joined: Sat Mar 26, 2016 6:19 am

Re: Leaving money as a legacy after death

Post by Flora »

Another Will suggestion is to leave an amount to charity equal to the lesser of a) $xxxx or b) xx% of estate after expenses.

I knew of someone 30 years ago who left a specific amount ($200k) to charities which ended up being almost 100% of her estate value, due to a reversal of fortune. When the Will was written, the $200k was maybe only 20% of her net worth. She did not intend to leave her adult child with so little.
User avatar
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Leaving money as a legacy after death

Post by dm200 »

This happened to a friend of mine who was the executor of the decedent's estate. The clergy sued to get their "cut" before tax and estate expenses were paid, held up the settlement of the estate, and ultimately lost in court, and had to settle for their share AFTER estate expenses and taxes were paid. It created unnecessary stress for the executor and the other beneficiaries of the estate, as well as added expenses.
Thanks for the feedback. Confirms that my late father's attorney gave good advice!
Post Reply