What Your Attorney Will Need to Know...

   Those interested in naming Southern Christian Home in their wills should be certain the precise, legal name and address of the Children's Home are used:

      Southern Christian Home
      100 W. Harding St.
      Morrilton, Arkansas 72210

The Life Estate Contract

   The Life Estate Contract is a contract that provides for a donor to transfer title to his or her home or family farm to a charity, reserving to her/himself the right to live in and on the property and receive all the income therefrom. At his or her death, the home or farm becomes the property of the charitable organization.

Example:

Roxanne Johnson has been living in her home for over forty years. She wishes to leave the home, and surrounding property, to Southern Christian Home. However, she would like to remain in her home until such time that she is no longer able to take care of the property.

Her attorney, Bill Wade, has suggested to Mrs. Johnson that she create a Life Estate Agreement with Southern Christian Home, whereby she will receive an immediate tax benefit from her charitable contribution while knowing that her home will be put to good use for Southern Christian Home after her death.

The Charitable Gift Annuity

   The Charitable Gift Annuity is a very simple contract between you, as a donor and Southern Christian Home. In exchange for an irrevocable gift of cash, securities or other assets, Southern Christian Home agrees to pay one or two annuitants, as specified by the donor, a fixed sum each year for life. As a donor, you also may be an annuitant and qualify for a federal income tax deduction and may even benefit additionally by having reduced probate costs and estate taxes.

Example:

Sam and Virginia Williams, a couple in their mid-eighties, have several Certificates of Deposit (CDs) that will mature in two months. Their estate planning attorney has been working with the Williams in reviewing their annual income, since the Williams would like to increase this amount due to some recent expenses they have been providing for one of their grandchildren.

By establishing a Charitable Gift Annuity with Southern Christian Home, the Williams will immediately increase their quarterly income due to their ages, and the increased percentage payable by law for this type of charitable transaction.

And, because the Williams are establishing this gift annuity in an irrevocable format, their estate taxes will be reduced as well.

The Charitable Remainder Trust

   Charitable Remainder Trusts were created by the Tax Reform Act of 1969 in order to provide an avenue by which a donor can transfer property to a trustee subject to the donor's right to receive either a fixed or variable percentage of the initial net fair market value of the property for as long as the donor, or the designee, lives. Whatever principal remains in the trust at the donor's or the designee's death, becomes the property of the beneficiary institution.
 

   Charitable remainder trusts provide either monthly or periodic (quarterly, semi-annually, or annually) income to the donor(s) or their designees. The donors receive an immediate benefit of a charitable income tax deduction. And, the property or cash equivalent is removed from their estate as well. The donor receives a reliable source of income that may be a fixed percentage of the trust's income (as in an annuity trust) or may vary depending upon the valuation of the principal of the trust at the beginning of each year. Upon the death of the donor(s) or their designees, the trust terminates and its assets pass to Southern Christian Home for the purposes originally specified by the donors.

Example:

Jim and Sara Jenkins, both in their 70s, have been reviewing their estate plans with their estate planning attorney, Bill Wade. The Jenkins have been successful in their investment strategies, and a particular rental property that they are using to produce monthly income has gained considerable appreciation since they originally purchased the property in 1971. Mr. Wade suggests that the Jenkins may wish to donate their rental property to Southern Christian Home, since Mr. Jenkins no longer wishes to manage and maintain the rental.

   By creating a Charitable Remainder Annuity Trust and placing the rental property within the trust as its principal, the Jenkins will immediately receive a significant income tax deduction for their contribution to the trust. Should Southern Christian Home determine to sell the rental property and reinvest the proceeds from the sale, the Jenkins will also receive an increase in the amount they receive annually, based on the current fair market value of the rental property at the time of the sale.
 

The Bequest

   A Bequest is something that is (a) given or left to someone by will, (b) handed down or (c) a legacy.

   Bequests given to Southern Christian Home are not subject to federal taxation. Created within the text of a Will, a bequest may be unconditional, or it may be based upon a residual amount of the estate. In addition, a bequest may be contingent, or it may be for a specific purpose.

Suggested wording for Bequests:

1. Unconditional Bequest
   "I give and devise to Southern Christian Home of Morrilton, Arkansas the sum of           (or the following described property), the principal and income to be used in such manner as the Trustees deem appropriate."
   
    

2. Bequest of Residue
   "I give and devise to Southern Christian Home of Morrilton, Arkansas all the rest of my property and estate, real and personal. The principal and income will be used in such manner as its Trustees deem appropriate."
   
    

3. Contingent Bequest
   "If all of the above-mentioned beneficiaries (devisees) should predecease me, then I give and devise the property, real or personal which each such beneficiary (devisee) would have received had he survived me, to Southern Christian Home of Morrilton, Arkansas, the principal and income to be used in such manner as its Trustees deem best."
   
    

4. Bequest for a Specific Purpose
   "I give and devise to Southern Christian Home of Morrilton, Arkansas the sum of $          (or the following described property), to establish THE          FUND. The FUND income, but never the principal, should be used for          . If, in the judgment of its Trustees, change of circumstances should at some future time render the designated use of this FUND no longer appropriate, then the Trustees should use the FUNDs income to further the objectives and purposes of Southern Christian Home.

The Will

• What if I do not have a will?
  First of all, don't feel bad! Last year, 71 percent of Americans who died did so without having a legal, valid will in place. When a person dies "intestate" or "without a will," the State of their residence imposes its legislative-designed will on that person and their estate! The issue is not whether you have a will or not, but whether you wish to control the disposition of your estate through your designated executor, or leave it up to the State Legislature to decide.
  
  Without a will, the State will determine who will provide legal guardianship of any minor children; who will dispose of any real estate holdings; who will receive your legacy. All within its legal limits and timeline.
  
  Frankly, a will is a 'common sense' thing to do. To choose not to have a will is comparable to purchasing a life insurance policy without designating who the beneficiaries are!
  
   

• Isn't a will time-consuming and costly?
  No, even the most complicated of estates can be taken care of in a small amount of time at a qualified attorney's office. The cost is very inexpensive, especially when you consider what is at stake if you do not have a will. And once your will is in place, it does not have to be rewritten unless you choose to do so. In many cases, it may be a one-time effort. However, changing a will, as your life changes, is very easy to do and generally requires only a minimum amount of your time.
  
  A simple will may cost as little as $75 to $100. Even complicated wills do not cost significantly more than this. In most cases, you will take several steps to complete your will including: filling in of forms which state specifically how, and to whom, you would like to leave your estate; meeting with your attorney once or twice; and finally, signing of the will. It really is quite easy to do, and is inexpensive, especially compared to the cost of dying without one!
  
   

• Why should Southern Christian Home be included in my Will?
  Remembering Southern Christian Home is one of the best ways that you can help insure that the institution you love so much continues on. It can enable Southern Christian Home to meet the needs of our future with greater certainty and a clear direction.
  
  Many of us would like to be great philanthropists to a variety of charities while we are living, but we just do not have the means to do so.
  
  Remembering Southern Christian Home in your will may be your best opportunity to do something really significant for the institution that has done so much for so many children and young adults through the years.
  
  Gifts to the Home are also removed from your estate immediately and not taxed by the government. Estate taxes quickly rise to a level where as much as 50 percent of an estate is subject to taxation! A gift to the Home can actually replace what otherwise would have gone to the government coffers.
  
   

• How do I do it?
   

  1. Specify a certain amount (cash) or specific piece of property that you want to give.

  2. Stipulate that a portion of the estate be given, for example, 25%.

  3. Designate that the remainder (whatever is left after expenses, etc.) be given.