A recent article out of the Wall Street Journal addressed the interesting topic of the place of religion in estate planning. One of the messages of the article was that you can’t do adequate estate planning without at least asking the question of how/whether religious beliefs factor into your estate plan.
For many, bringing their religious faith-or lack thereof-into the process helps clarify financial goals. This naturally helps people begin thinking about how they intend to reach those goals through their estate plan.
Whether it means tithing, serving your community, or donating to specific religious causes, there are many ways that religious belief can factor into estate planning. Gift-giving is one important possibility. In 2011 and 2012, individuals can leave up to $5 million in gifts during their lifetime free of tax. In addition, every individual may leave up to $13,000 per year in gifts without trigger any gift tax. Gifts below that amount do not reduce your $5 million lifetime exclusion either. This means that there is a lot of room for making charitable donations without incurring tax. Strategies in this area can be an important part of a complete estate plan.
Religious beliefs may also affect your selection of guardians for your children, your living will and choice of a health care proxy, as well as the types of investments you use to fund trusts.
Whatever one’s beliefs may be, it may be helpful to sit down and write out your spiritual values and the financial goals that come from them. There may be both short and long term goals, and that is okay. The point is to beginning thinking about how you can accomplish those goals. It is important to work closely with an attorney on these matters. Don’t be afraid to bring your religiously motivated goals to the table.
Source: Wall Street Journal, “Where Religion and Business Do Mix,” Veronica Dagher, Sep 19, 2011.