While visiting her favorite charity's website, Sr. Sofia came across the idea of a "give it twice" trust. She contacted the charity for more information. The charity's gift planner explained that a give it twice trust would allow her to first give income to children through the trust, and then the trust would later transfer the trust balance to charity.
Sr. Sofia: Before my husband Br. Isa passed away, we talked about our estate plans. We agreed that we wanted to treat each of our three children equally and that we wanted to give to our favorite charity.
The gift planner told Sr. Sofia that she had the ability to use her $800,000 estate to do something significant for both family and charity. Sr. Sofia was concerned because while her two oldest children are financially responsible, her youngest, Jim, "spends money like water." Sr. Sofia was afraid that if Jim were to receive a lump sum cash inheritance, he would spend it right away.
The gift planner explained that the give it twice plan could be very helpful. Sr. Sofia could transfer $400,000 from her IRA at death to the trust. Her children would each receive one-third of the income from the trust over 20 years. Annual payments would prevent Jim from squandering his inheritance while giving him the chance to learn to save and invest. After 20 years, the trust balance would be transferred to charity. In addition, by using her IRA, Sr. Sofia could save on income tax because the special trust is tax exempt.
Sr. Sofia: I established a give it twice trust and was thrilled with the plan. The prospect of helping my children and my favorite charity made me happy, and I knew it was the right thing to do.
Is a give it twice trust right for you?
The give it twice trust can be an invaluable part of any estate plan. We would welcome the opportunity to talk to you about how this trust could benefit your family. Please give us a call to discuss this important estate planning and giving strategy.
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