Why Understanding Your Assets is Crucial to a Successful Estate Plan

My grandmother made the best apple pie I have ever tasted. Watching her take the ingredients and put them together just so was a sight to behold — especially since she did not have all the ingredients written down! When she passed away, she handed the recipe down to my mother, but neither she, nor my sister or even my wife could replicate it. Their pies were pretty good, but they still did not taste like my grandmother’s. Why? We did not have all the ingredients!

The same can happen with an estate plan. You can develop a pretty good plan, but if you don’t know all the ingredients (i.e. assets), it may not turn out the way you intended. Knowing what makes up your estate is very important, because what you desire to accomplish with the distribution of assets at your death depends on the type of assets to be distributed.

You have several classifications of assets in your estate, including liquid assets (checking and savings accounts) and non-liquid assets (real estate, investments, retirement plans and life insurance). While all of these assets make up your estate, they are handled differently when distributed upon your death. 

Let’s look at two asset examples:

  • Personal property – These assets are part of your gross estate and the portion of the estate handled in the probate court. They are distributed to the person(s) you name in your Last Will and Testament (LWT). It’s one of the easier assets to handle.
  • Life insurance – This asset is also part of your gross estate, but it is not a part of your probate estate. Life insurance passes to a named beneficiary after your death.

You may ask, “What’s the big deal? Why do I need to be concerned about asset classifications?” It becomes a big deal when your intentions, based on what you have written in your LWT, are not accomplished because you did not consider the types of assets you have and how they are passed to beneficiaries. The bulk of your estate could actually pass outside the terms of your LWT. Let’s explore how this plays out:

Let’s say Mrs. Jones is widowed with two grown children. She has an estate made up of $20,000 in a checking account, some furniture ($5,000), a vehicle ($5,000) and a life insurance policy worth $100,000, in which each child is 50 percent beneficiary of the policy. If we add all these together, her estate would be worth $130,000. In her LWT, she wants 30 percent of her estate to go to her church and 70 percent to go to her children. Therefore, she intends, based on the amount of assets she has, that $39,000 will go to the church and $91,000 will go to her children.

Based on her assets and how they are classified, however, will her wishes be carried out in that way?

Per the beneficiary designation calling for the policy to be divided equally between her children, the life insurance will go to her children and will not be a part of her probate estate. The children, therefore, receive the $100,000.

What assets are left? The remaining assets $30,000 make up her probate estate. Based on her LWT, the church would then receive 30 percent of the probate estate ($9,000) and the children would receive 70 percent ($21,000). The church, therefore, ends up with $9,000 and the children receive $121,000 total. Is this what she intended? Not per her LWT. She did not take into account that the life insurance would pass to her children outside her probate estate.

This scenario often occurs in estates. Life insurance, retirement accounts and annuities normally are controlled by your beneficiary designations and not your LWT. If Ms. Jones had assessed the type of assets she owned, she could have made different decisions to carry out her true wishes.

So how can you avoid issues like this? Download our 10 Minute Estate Auditthen contact us and we can walk you through the process of putting your Estate Plan in order. We’re ready to help!

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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Increase Giving Through Qualified Charitable Distributions

One of the newer avenues of charitable giving is called the Qualified Charitable Distribution (QCD), which comes from the IRAs of persons who have to take Required Minimum Distributions (RMD). Though this has been an option for a number of years, we are seeing more people learning about and taking advantage of being able to support their favorite charities (like their church) from their IRAs. For more details on how this type of giving works, see my article here.

As a leader in the stewardship ministries of your church, you have a great opportunity in front of you to encourage a means of giving that not only saves taxes for all eligible persons, but also provides support for your ministries utilizing resources that may be currently untapped. Church members who are eligible for the QCD recently received a notice from their IRA provider regarding the amount they are required to take out of their IRA for 2019, so now is a great time to promote this way of giving while it is still fresh on members’ minds. Whether through your church newsletter or a special series of announcements, the key is to start raising awareness. Many people are not even aware of this option, so it’s important to educate them. If you’d like assistance developing your communication plan, please give us a call. We’d love to help you develop your strategy in gathering resources for your Kingdom work. 

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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The Danger of the Joint Bank Account

Joint account ownership is a convenient way to own a bank account or other financial account with someone. Key benefits include the fact that all owners of a joint account can conduct business on the account. It is also useful that there is a right of survivorship among joint owners, meaning if one of them dies, the surviving owner is now the owner of the account and does not have to go through the probate process in order to have access to the money. For these reasons, married couples generally hold most of their bank accounts as joint owners. 

While joint accounts generally work well for married couples, when a spouse dies, the survivor has to be mindful as he or she considers adding someone else as a joint owner on bank accounts. The very advantages of jointly owned accounts for married persons may actually become detriments when owning an account jointly with a non-spouse. There are several potential issues with this setup:

1. Unintended inheritance. Under standard joint account terms, the non-spouse joint owner will usually become the new owner on the assets in the account if the original survivor dies, irrespective of what his or her estate plan directs. For example, Sally has three children. Her son Johnny lives in the same town. For convenience, Sally adds him to the account, so he can “write checks and talk to the bank” if a need arises. She also has a will that directs her Executor to divide her estate equally among her children. However, by the terms of the joint bank account, the money in the account will bypass the provisions in the will, so whatever money was in the account at Sally’s death now becomes Johnny’s, and he still takes a third of his mother’s estate. This was not Sally’s intention, but based on his joint ownership, Johnny is now the new legal owner of the money and does not have to divide it with his siblings. 

2. Unexpected creditors. A creditor has the right to access bank accounts owned by a debtor to pay for a debt on which the debtor has defaulted, regardless of how the debtor became an owner. Thus, if Johnny has a creditor looking for assets to seize, the joint account with Sally can be taken for Johnny’s debt, even though Sally had nothing to do with the debt. Additionally, if Johnny divorces, there is a possibility the joint account could be brought into the divorce proceedings. Even if Sally can successfully prove the account is not part of Johnny’s marital estate and keeps the money, the favorable result may only come after the stress and expense of intervening in Johnny’s divorce. 

3. Unforeseen access. When you add someone to an account, the person gets full clearance and rights to the account. Thus, it is extremely important that the new owner can be completely trusted. Sometimes access to the funds can be too great of a temptation for someone. If a situation arises in his or her life in which he or she needs money, the new joint account can become a source of those funds. Even if he or she expects to repay the money, the fact is the money may never come back into the account. And the new joint owner has done nothing wrong legally. After all, he or she is a joint owner. 

Are there any good solutions to allow someone to help the survivor out with his or her banking? There actually are two good remedies that carry less risk than full-on joint ownership:

  • Utilize a Power of Attorney (POA). Through a POA, the survivor grants a person (known as an Agent or Attorney-In-Fact) either general or limited authority to transact any business that the survivor can or could do on his or her own. The Agent has access to bank accounts (usually along with other financial assets) but is never the owner. Thus, since the Agent is not an owner, the survivor’s Last Will and Testament will still control the ultimate disposition of the bank accounts, and none of the Agent’s creditors will have access to the survivor’s funds.
  • Name the person as an authorized signer on the account. This gives the person access to the account without being an owner. An authorized signer requires a special designation on the account’s signature card. Financial institutions will have specific procedures to make this type of appointment. 

Is joint ownership with a non-spouse always a bad idea? No. In fact, when used properly, it is not. Joint ownership can be an effective way to ensure someone gets an inheritance and an efficient technique in avoiding probate court. The key is to ensure the survivor is fully informed of the advantages and disadvantages before making this important decision. 

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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Your 2019 New Year’s Resolution: Start a Legacy Ministry in Your Church — Part 2

Last month we discussed making a New Year’s resolution to create a legacy ministry in your church and what that would mean for your church. For review, a legacy ministry is:

A way to expand the stewardship conversation with believers beyond tithes and offerings. It’s a tool by which Christ followers plan their estates to not only take care of their families at death, but to also establish a legacy that supports the work of the Kingdom—through the local church and beyond.

Studies reveal when a person makes a contribution from securities (stocks, bonds, mutual funds, etc.), total contributions to churches and other nonprofit organizations increase at a greater rate than from gifts of just cash. Most of the time these are larger gifts, and they are not from assets we typically utilize each month for our household operating expenses. These types of gifts can feel smaller when compared to a cash gift. Most of the time we do not think about these assets when we think about giving, but when we do, it reminds us of the wealth we have that has been provided to us by God.

By creating a legacy ministry in your church, you are helping members think about the legacy they can leave for future generations to propagate the Gospel and make a significant impact for the Kingdom of God. There are several other benefits for the church as well, including:

  • A new income stream for collecting resources to engage in the Kingdom work to which it has been uniquely called in its community
  • A steady and consistent income stream to support Kingdom work
  • Another avenue to develop the spiritual discipline of stewardship among members

This type of ministry provides benefits to members who make contributions as well, including:

  • Additional lifelong income created by utilizing a typically non-income-producing asset during the donor’s life before then benefiting the church
  • Immediate income tax deduction as a charitable contribution
  • Reduction or elimination of capital gain taxes and inheritance taxes, because the asset is transferred to the church 
  • A new way to carry on the Gospel of Christ

As a leader, how do you begin a legacy ministry? The Tennessee Baptist Foundation (TBF) is here to help you walk through the process by:

  • Helping you determine how the concept of stewardship through estate planning fits in the overall Kingdom strategy of your church 
  • Helping you identify and train leaders who will communicate the ministry to the church
  • Using specific examples of how your congregation can leave a legacy
  • Helping develop policies and build an infrastructure
  • Providing ongoing assistance as we work with staff and church leadership 

Begin the new year with a new ministry that will help your church gather new resources to fund its mission. The TBF is ready and willing to be a partner with you. Give us a call today (615-371-2029).

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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Make a 2019 New Year’s Resolution: Start a Legacy Ministry in Your Church

As you think about 2019 and what it holds for your church, why not consider making a new year’s resolution to create a Legacy Ministry in your church?

A Legacy Ministry is a way to expand the stewardship conversation with believers beyond tithes and offerings. It’s a tool by which Christ followers plan their estates to not only take care of their families at death, but to also establish a legacy that supports the work of the Kingdom—through the local church and beyond.

This area of stewardship is often left out of the plans of many congregations. With so much emphasis on the church’s operating budget and the weekly giving, all too often church leaders miss the opportunity to share with their congregation ways in which they can impact the Kingdom of God using assets unlikely to be available until after they have left this earth.

Proverbs 3:9 says: Honor the Lord with your wealth and with the first fruits of all your produce. (ESV)

When you think about “first fruits,” especially in the Old Testament, the concept of tithing comes to mind. We understand the command to tithe our income and bring it to the church as a part of our worship of God. But this verse states we should also honor God with our “wealth.” Our wealth refers to the abundance of material blessings God has provided for us to manage over our lifetime. So, while tithing is very important, we should not forsake the command to honor God with our wealth.

A sobering statistic reveals less than 10% of estates include a charitable bequest, and less than 2% of Christians include their church in their estate plan. Why is this? I believe most have not been asked! There are many charities and causes available today that are good and worthy of support. Most nonprofit agencies make a concerted effort to ask donors for large gifts that may come out of the “wealth” mentioned in Proverbs 3. The church is finally realizing it cannot assume members will intuitively give out of their estate simply because they have given to the church all their life. The church needs to actually “make the ask,” and a legacy ministry is the way to do it.

What benefits does a legacy ministry have for the church and its donors? How do you get started? Stay tuned for next month’s article to find out.

Ready to take action today? TBF would love to help you and your church. Give us a call today at 615-371-2029 to get started.

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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How to Save Income Tax by Charitably Giving from your IRA

As we begin 2019, people aged 70 1/2 and older who own an Individual Retirement Account (IRA) will begin getting notices from their IRA providers about their Required Minimum Distribution (RMD) for 2019. The RMD is the amount (calculated on the owner’s life expectancy) the IRA owner must take out in 2019 to avoid a significant tax penalty of 50 percent of the RMD amount. The RMD is the government’s attempt to recover some of the tax deferral the owner has enjoyed over the years, as any distribution from an IRA is taxable to the owner in the year of distribution.

However, if you are an individual aged 70 1/2 or older with an IRA and have charitable inclinations, there is still a way to save income taxes for 2019: the qualified charitable distribution (QCD). The IRS allows your IRA provider to pay your RMD directly to a qualified charitable organization (like your church or other Baptist cause). If you elect to do this, the distribution paid to the charity is completely non-taxable to you, meaning you do not have to include it with the rest of your income for the year. Furthermore, the amount paid to the charitable organization is credited towards your RMD requirement for the year.

For example, Bank of Galilee notifies John T. Baptist he must take $10,000 from his IRA in 2019 in order to satisfy his RMD. John is in the 22 percent income tax bracket, and he already knows he will give at least this much to his church in 2019. Rather than taking the distribution, paying taxes on the distribution, and then writing a check to the church out of the remaining amount, John can direct the bank to send $10,000 from his IRA directly to the church. By doing so, John saves $2200 in income taxes, satisfies the RMD requirements and supports the Kingdom work of his church with the contribution.

This tax savings technique has become even more important in recent years due to the higher standard income tax deduction. While the higher standard deduction is better for the vast majority of Americans, it reduces and even eliminates the possible tax benefits of giving to a charity, since the amount given to charities (along with other deductible items) must exceed the standard deduction to produce a tax benefit to the donor. The standard deduction is even higher for persons over 65 ($13,600 for individuals, $26,600 for couples). Thus, the QCD is even more valuable for those who can utilize it.

A QCD does not have to be aggregated with other deductions before you receive a tax benefit. It is a standalone, dollar-for-dollar reduction in your taxable income. Even if you do not have deductions exceeding the standard deduction and are consequently unable to itemize your taxes, you still can take advantage of the tax savings in reduced income taxes created with a QCD. In fact, it may have even greater benefits for you, as you will be keeping your reported income lower, which might further lower your Medicare premiums for parts B and D that are based on household income.

As with any government tax strategy, there are rules to follow:

  • You can only distribute $100,000 from the IRA to qualify for QCD treatment.
  • You must have an accompanying receipt from the charitable organization to prove it received the distribution.
  • The distribution must be made directly to the charity to qualify (either the IRA provider sends the check directly to the charity or makes the check payable to the charity and gives it to the donor to deliver).

*Note that you cannot make an RMD from all types of IRAs, nor from other retirement plans, but your financial advisor will be able to advise you as to your eligibility.

With most of 2019 and the year’s charitable giving yet to be made, it is a great time to look at your RMD amount for this year. If you know you are going to be making contributions to your church or other charity, then it is worth a conversation with your financial advisor. This time next year, when you are calculating your 2019 income taxes, you will be glad you did.

Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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3 Reasons to Make Estate Planning Your Easiest New Year’s Resolution

The key to a successful new year’s resolution is to be realistic. It’s great to have goals, but going from never exercising to hour-long workouts seven days a week is probably not a sustainable resolution. One resolution you can easily accomplish this year is estate planning. Many people feel like they don’t own enough to warrant an estate plan. But the truth is, if you own anything, you have an estate, and if you don’t make a plan, the state gets to decide what happens to it. It might sound complicated, but creating an estate plan is a simpler than you think. And it’s something you can feel good about having gotten done, even if your other resolutions have gone by the wayside.

There are several reasons making an estate plan should be on your list of new year’s resolutions this year, because there are enormous benefits for you, your family and even your community when you put one in place:

  1. It takes stress off your family.
    Everyone has an estate, but not everyone has a plan. While it may be a bit uncomfortable to talk about at first, if you pass away without a plan in place, it can wreak havoc on your family. Not only will establishing an estate plan take one more thing off your plate this year, it will prevent future stress for your family members, especially as they will be already going through a tough time. Creating your plan will relieve worry and stress for you today as well as for your family tomorrow. It’s the new year’s resolution that keeps on giving.
  2. Your estate plan can bless the future generation of believers.
    In the same way creating an estate plan can have a ripple effect of blessing your family well into the future, it can also bless people you’ve never even met. While you’re setting up yourself and your family for peace of mind and security, you can also invest in the next generation of believers. By dedicating a portion of your estate to organizations or ministries you are passionate about, you in turn impact even more people for the Kingdom. Your new year’s resolution today will continue to change lives for years to come. While certainly other resolutions are beneficial, it’s hard to say something that powerful about cutting back on sugar or cleaning out the garage.
  3. Your estate plan can pour back into organizations and ministries that have poured into your life.
    When you do designate a portion of your estate to a ministry or organization you love, you’re not only impacting future generations, you’re saying “thank you” for the impact they have made on your own life. Whether it’s your church or other Baptist cause, the influence these leaders and the missions they pursued had on your life changed it for the better — perhaps even shifted its course. Estate plans are the perfect opportunity to give back to the organizations and ministries that have poured into your life so powerfully, whether your paths crossed decades ago or you’re still engaged today.

This year, make a new year’s resolution that is not only achievable, but has lasting affects on your family, community and the church at large. Creating an estate plan is easier than you think, and the Tennessee Baptist Foundation is here to help. Since 1938, we have been helping Baptists all over the state approach their estate plan from a biblical perspective, walking with them every step of the way to create a plan that works for their family and impacts the Kingdom of God.

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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3 Reasons Every Christian Needs an Estate Plan

While it is beneficial for every person to have an estate plan for the sake of their family, it is even more essential for followers of Christ. Though some people may be uncomfortable talking about the topic, it doesn’t have to be scary — especially for Christians, knowing that because of our faith and trust in Jesus, we have a glorious future to look forward to after death.

Throughout my career I have found there are three foundational reasons every Christian needs an estate plan:

1. Everyone has assets that must be distributed at death.

No matter your economic level, when you leave this life, the assets you have accumulated must be distributed somewhere. You may have heard the saying, “I have never seen a hearse pulling a U-Haul!” That is the reality. We do not take the material things of this life with us to heaven. That being said, it has to go somewhere, so we all need to make provisions to pass along the possessions we have. While many people might think they do not have very much, once they start listing all their assets on paper, most people soon realize they have more than they thought. Some assets will be distributed based on titling of the asset or beneficiary designation (real estate, life insurance, retirement accounts, etc.). Everything else needs to be distributed, and a last will and testament is the best way to do this. If you die without a will, the State of Tennessee will determine how your assets will be given away. So, it behooves all of us to have our own plan in place. After all, everyone has an estate, but not everyone has a plan!

2. It is an act of stewardship.

The Bible contains more than 2,000 verses related to money and stewardship. The Holman Bible Dictionary defines stewardship as “utilizing and managing all resources God provides for the glory of God and the betterment of His creation.”

One of the key words in this definition is managing. That is what the word stewardship boils down to. We are the managers of the resources God has given us. Every believer in Christ must understand the principle that God owns everything. Psalm 24:1 states, “The earth is the Lord’s, and the fullness thereof; the world, and they that dwell therein.” (KJV) A good manager will make provisions for things under his care. That does not stop at death. To be a faithful manager, we must make plans to pass along the assets under our care so they can be used to help others and proclaim the gospel of Jesus Christ. We all must be faithful stewards of our resources!

3. It is a powerful way for us to leave a legacy.

What do you want to be remembered for? I think it is intrinsic in all of us to want to leave some kind of legacy to our family and friends. One of the great opportunities we have as Christians is to designate something in our estate to take the Gospel to the next generation. The Tennessee Baptist Foundation is available to help any Tennessee Baptist learn how they can take care of their family and bless the next generation with a faith-based estate plan. Psalm 145:4 states, “One generation shall praise thy works to another, and shall declare thy mighty acts. (KJV) What greater way to help the next generation than to leave resources for them to proclaim the cause of Christ. It’s your faith and your legacy!

Give us a call today. We would love to help you steward your blessings well and leave a legacy of impact.

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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3 Tips to Build A Culture of Generosity in Your Church

In their book Contagious Generosity, Chris Willard and Jim Sheppard state, “generosity is at its core is a lifestyle, a lifestyle in which we share all that we have, are, and ever will become as a demonstration of God’s love and a response to God’s grace.” We serve a gracious and generous God. It should be only natural that every Christian have an attitude of generosity in all areas of life. Sadly, though, whether due to a shying away from financial matters or a fear of being seen as self-serving, this topic is not often discussed by church leadership. How can church leaders help bring about a culture of generosity in their church in a way that is both genuine and effective? Implementing these three practices is a great place to start:

  1. TEACH IT – As Baptists, teaching is important in the life of our church, and it’s the main focus of Sunday school and Bible studies. It is a part of our DNA to help us understand God’s Word and apply it our daily lives. Knowing that more than 2000 verses in the Bible concern money and finances, we need to teach what God’s Word says so we can make life changes in how we handle money. This will allow us to become better stewards and give us the freedom to be more generous with the material blessings God has given each one of us.
  2. TELL IT – They say a picture is worth a thousand words. I believe a story is better than 100 sermons! Stories come from our life experience, and we are able to share these to encourage others. We need to have members share their stories to show the impact of how generosity is making a Kingdom Impact, and not only that, but how they have been blessed to be the instrument of God’s love and grace. It is a way for members to grow in their own discipleship.
  3. PRAISE IT – Too often in the church, we do not say “thank you” as much as we should. Many of the secular nonprofits do a better job in donor relations than the church. We need to cultivate gratitude as well as generosity. Sending notes, emails and even, when warranted, a public expression of gratitude will foster more generosity in your congregation. In an age where everything we see focuses on “what’s in it for me,” gratitude is one of the greatest spiritual characteristics we can model for our members.

Willard and Sheppard also made this statement in their book about generosity:

“Generosity, when motivated by genuine love for God, is contagious, drawing others to wonder why people would give of themselves while expecting nothing in return. In fact, a life and a church community that is characterized by generosity may be the most compelling, effective evangelism strategy we have as followers of Christ.”

That is the type of lifestyle we should encourage within our congregations.

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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The Queen of Soul and The Bandit: A Tale of Two Estates

Over the last couple of months, we lost two American entertainment icons: Aretha Franklin and Burt Reynolds. Franklin’s musical talent made her one of the best-selling and most critically acclaimed musical artists of all time, with more than 75 million records sold worldwide, earning her the title of “Queen of Soul” and definitely earning our R-E-S-P-E-C-T (you’re welcome for now having that song in your head). While Reynolds may not have been the most critically acclaimed actor, he did have great commercial success in the box office and on the small screen with arguably his most iconic role, Bandit in Smokey and the Bandit, permanently embedded in the popular culture of the 1970s. While they both lived lives in the spotlight, in their deaths we see a big difference.

Like many other celebrities (Prince, Farrah Fawcett and James Brown to name a few), we now know that Franklin died without a will or trust in place. Some experts have estimated her estate to be worth approximately $80 million, with the possibility of it being worth even more depending on how her intellectual property (copyrights, licensing, etc.) is valued.

With an estate this size, one wonders why she didn’t have an estate plan to manage the complexities and uncertainties her family now faces. If nothing else, the tax liabilities of an estate this size would typically motivate a person to put a plan in place to at least reduce — if not completely eliminate — estate, inheritance and income taxes. When Franklin sang that iconic line “I’m about to give you all my money,” she might as well have been talking to the government about the enormous tax she was going to owe!

Franklin was single at the time of her death, so her four sons are equal heirs to her estate. Her niece has been appointed by the Court as executor. Early reports say that her longtime companion and her sons are taking adversarial positions against each other regarding how her estate should be divided. Franklin was known for being a private person when it came to her finances, but now, much of this information will be available for the world to see as the parties work through dividing her estate. Even if she had had a will or trust, there is certainly no guarantee that her family would not be in court, but these testamentary documents would certainly stand as a clear expression of her desires and would reduce the chances of disputes arising. Now, it will be up to the court to determine the best way for her estate to be decided.

What about Reynolds? While by his own admission, he earned and lost a fortune during his lifetime due to a couple of divorces and poor business decisions, he did apparently have a very well thought out plan as to what would happen to his assets when he died. In his last will and testament, he states he intentionally excluded his only son from the will. While at first this might sound harsh, Reynolds explains in his will that he did this because he had already provided for his son by other means. Apparently, Reynolds had a trust — a private document — already in place for the benefit of his son. By choosing this method of planning, it’s highly unlikely his assets will be fully known, and his son’s privacy is protected (trusts are often utilized in Florida due to the state’s unique probate rules). So just like the Bandit tried to avoid the governmental authorities in the movie, Reynolds, by careful planning, has minimized the court’s involvement with his family and his estate.

So what do these celebrities’ estates have to do with us who aren’t celebrities with vast fortunes? Statistics show the majority of Americans are like Franklin — no will or estate plan in place. While many of us think we do not own enough possessions to do much planning, the reality is we will all own something at our death — fortune or not — and not having a will creates all kinds of issues for family and friends. When a person dies without a will, the court decides on how estates will be divided — not according to the desires of the person who died (since there is no Will expressing those desires), but according to the default laws of the state. The court chooses who will administer the estate, even if the person who died knew who would do the job best. The court decides who will care for minor children as well.

Like Franklin’s estate, which may become tangled in litigation and discord for years to come, the estates of regular people are likewise ensnared with conflict and tension every day when the deceased person made no thoughtful provisions for his or her estate upon death.

By contrast, in estates like Reynolds’ in which a person has established a will or trust, there is certainty and peace of mind. Everyone knows who will be the executor. They know how the estate will be divided. A guardian who shares the values of the estate’s owner can be appointed to care for minors. Appropriate plans are made to accommodate complicated family situations (i.e. blended families, heirs with special needs, heirs with personal issues, etc.). An estate with a will or trust is not guaranteed to be free of all turmoil and conflict, but the problems are certainly reduced.

When asked why Franklin had no will, her attorney commented that he had talked to her for years about putting something in place, but she just never “got around to it.” So often when I meet with families after the death of a loved one, they respond the same way: “We talked about it, but never got around to doing it” or even, “We didn’t know where to start.” As that person’s estate is administered, the results are much different than what close family members know that the deceased person wanted; however, nothing is enforceable since these intentions were never formulated legally.

Thinking about developing and implementing an estate plan can seem overwhelming, and it normally takes some time as you consider all the things that must be evaluated in planning an estate. This is where an estate planning professional, like a lawyer, accountant, or a friendly estate planner with the Tennessee Baptist Foundation can help you begin the process and guide you through it. These advisors can help you consider all the facets of your life in light of your desires for your estate and advise accordingly regarding the best way to plan your estate.

To quote the great theologian Jerry Reed in the Smokey and the Bandit theme song, you may feel like you have “a long way to go and a short time” to get to planning your estate, but the key is to get started. Take one step forward today and know you’re on your way to a well-planned future for your family.

Everyone has an estate, but not everyone has a plan. Do you have a plan? Take our 10 minute estate plan audit to get started.

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