Introduction to Estate Planning
Many WSU alumni and friends consider including the University in their estate plan so they can continue their annual gift in perpetuity or to make a special gift not possible during their lifetime. This can be accomplished through a Will or Living Trust bequest or by designating WSU as a beneficiary in your life insurance or qualified retirement plan.
Through smart estate planning it is possible to take advantage of gift planning strategies that feature many attractive benefits, such as increased income, reduced taxes, and an opportunity to see your gift at work.
One of the first steps in beginning an estate plan is to think through your values and to write your values into a plan. Things to consider are:
- What values or principles have guided how you have lived your life, raised your children, and/or run your business?
- What charitable organizations have you supported as an outgrowth of your values?
- What has been the most satisfying charitable gift you have made?
- What role has philanthropy/volunteerism played in your family's life and what value would it bring to your children or grandchildren?
- What would you like to accomplish through your philanthropy?
There are a variety of gift planning strategies to consider when planning your estate. Typically, the less control retained by the donor, the greater amount of tax benefits received. The WSU Foundation Gift Planning team is happy to meet with you to discuss how these strategies can benefit you, your loved ones, and WSU.
A Smart Estate Plan Should
- Meet your goals for you, your loved ones, and your favorite charities.
- Determine who will make medical and financial decisions if you become incapacitated.
- Plan for the transfer of assets at your death.
- Plan ways to reduce estate and/or income taxes, if necessary.
How Does Your Plan Measure Up?
- Do you have a Will or Revocable Living Trust that is less than three years old? (If you have a Revocable Living Trust, you may still need a Will to dispose of assets not placed in trust and to name executors and/or guardians.)
- Do you review your Will or Revocable Living Trust every year to ensure it remains up-to-date?
- Do you have arrangements for making health care decisions if you are incapacitated?
- Do you have a Revocable Living Trust or durable power of attorney that allows others to make financial decisions for you if you become incapacitated?
- Have you arranged for an orderly transfer of your business interests at death?
- Do you know if your estate is taxable at the federal and/or state level? (Recent changes in state and federal laws may affect your plan.)
- Do you know that some assets are twice-taxed? IRD assets (Income in Respect of Decedent) are considered tax-burdened assets. It may be more tax-efficient to leave these assets to charity.
- Have you arranged through your Will, Revocable Living Trust, or qualified retirement plan to continue support of your favorite charities after death?
- Complete a helpful questionnaire.
- Establish objectives for you, your loved ones, and your favorite charities.
- Inventory your assets.
- Consult professional advisors. The WSU Foundation will be happy to provide referrals.
- Consider tax implications.
- Tax-favored assets to family and loved ones.
- Tax-burdened assets, such as savings bonds and qualified retirement plans to charity. If heirs are designated as the beneficiary of these assets, they will have to pay income tax and your estate may have to pay estate tax as well.
- Design your plan. No two plans are the same.
- Complete and finalize your plan.
- Review your plan periodically as tax laws and life goals change.