| Bequests: The Will Behind the Will
Personal considerations in making or revising your will
O Great Guru, what is the meaning of life? That question has given rise to many a cartoon and joke. But it is also a serious question that we all seek to answer.
The meaning of your life is what you will it to be. It is shaped by the way you choose to invest your moments and years, your energies and resources. By the way you touch the world around you. The way you transform and pass on everything that comes into your mind and heart and hands.
Looking back over our lives, most of us find reasons for both celebration and regret. We are gratified to see how we've touched the world in constructive, caring ways; and we know the pain of opportunities missed and choices made that we might now make differently.
Fortunately, the wisdom of maturity is often accompanied by resources that may not have been present earlier in our lives. The assets accumulated through years of disciplined work and saving are like crops ready at last for harvesting, and what we do with that harvest represents the culmination of an industrious lifetime.
Your "last will and testament" is much more than a legal document. It is testimony to your inner will -- the central values and commitments that have emerged from a lifetime of learning, growing, and working. Through the provision of that document, you express what you have come to believe about the meaning of your life.
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To whom will you leave your possessions?
One thing we know for sure: we can't take it with us! But because we know that, we can begin experiencing, even now, the once-in-a-lifetime joy of giving gifts to those we love without any thought whatever of our own personal needs! That's what making a will is all about.
You'll think first of those closest to you: your spouse or perhaps a lifelong friend or companion; your children or the children of your siblings or closest friends -- all of those who make up your own unique family circle. In some cases that family circle will extend to an aging parent, or an aunt or uncle with whom you feel a special bond. It may also include grandchildren or other members of the newest generation to whom you'd like to give a special boost in the early years of their life's journeys.
But not all of our parting gifts need to go to individuals. Groups and institutions, too, play a large part in our lives. Think of those that have been important to you: the schools that have educated you or other important relationships like your church or service organization. A bequest to such an organization or institution will enable it to serve others as it has served you. Or consider other institutions that have not benefited you directly but in whose purposes you deeply believe. This may be the time to demonstrate your support for them.
Naturally, this is simply a suggested list of possibilities. Only you can decide who belongs on your list.
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How much will you give to each?
This may seem at first to be a difficult question, partly because as you write or revise your will you do not know just what the total of your assets and other possessions will be at the time of your death. Don't worry too much about that. You probably know enough to place a dollar value on the most important gifts, and other gifts can be contingent upon the total available or designated as shares of the residue after dollar-specific gifts and estate costs are covered.
Think first of those persons and institutions who need or deserve significant financial support from your estate.
If you are married, your spouse will be included here, but it is important to bear in mind that much of "your" property is already co-owned by your spouse and will pass to him or her at your death. Your concern at this point is whether a portion of whatever separate property you hold should also be designated for your spouse's lifetime needs.
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What is best for the children?
As parents, we naturally want to do "what is best," but as we all know, determining just what is best is not so simple! How much should we give them?
When our children were small, "best" did not always mean giving them all they wanted or all we could afford. We wanted them to be healthy and secure but also to learn responsibility and self-reliance. The same is true in their adulthood. The most treasured gifts we received from our parents were not always those of great dollar value but those that reflected who they were. The same will be true of the legacy we leave to our children.
The gifts they value most may well be personal items like photos and diaries, heirlooms and mementos. The dollars we leave to the institutions and causes we believe in may also, in a sense, be gifts to our children, making better the world in which they live and reminding them, by our example, of the deeper meanings to be found in life.
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Should children receive equal shares?
When they were small, we loved them equally -- but that did not always mean treating them just alike because their needs differed. Is it any different now that they are older?
Because of limited earning potential, health problems or disabilities -- or the size of their own families -- some of our offspring may have significant monetary needs. Others will be financially self-sufficient and pleased to inherit personal items of lesser dollar value.
Our bequests to our children need not -- and perhaps should not -- be identical, so long as they reflect our sense of fairness and the equality of our love.
Other individuals for whom you wish to provide some measure of lifetime support through your will may include longtime friends, a companion or housemate, or other relatives who need financial security. The institutions and causes you wish to support by bequest may be included either for specific dollar amounts or fractional shares of your estate or its residue. For simplicity and effectiveness, you may wish to limit the number of such charitable beneficiaries so that each gift will be of meaningful value relative to the size of your estate and the nature of the recipient organization.
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In what form will you give?
This question moves us toward the more technical, tax-sensitive considerations in writing or revising a will, many of which lie beyond the scope of this overview. We mention, however, some of the general possibilities you may explore in detail with your attorney and financial advisors.
Bequests to those persons for whom you wish to provide financial support may, of course, always be made in a lump sum; but depending on your goals and the circumstances, other methods may be preferable.
For example, leaving everything outright to your spouse, while an expression of trust and affection, may cause unnecessary estate taxes. Those taxes can often be avoided or reduced by having part of your estate flow into a trust that pays your surviving spouse income for life and then distributes the remaining principal to your children or others. Your attorney can explain the appropriate trust for your circumstances.
Not just tax implications, but also an individual's capacity for handling money, will determine the form of your gift. Some children would invest a lump sum prudently. Others lack self-discipline or have no idea how to manage property; for them, the best course may be a trust or annuity that makes regular payments.
There are plans that enable you to provide for both family and charity. For example, in your will you could create a charitable remainder trust that would provide a stream of payments to a sibling, children, or others and then, at the end of their lives, distribute the remaining principal to Cal Poly. If you have children or grandchildren to whom you want to give your property eventually -- but not until they are more mature -- you could create a lead trust that would make payments to Cal Poly for a period of time, then pass the principal to the children or grandchildren. The possibilities are as varied as family circumstances. Simply be aware that you need to consider not just the amount to give each person, but also the best way to give it.
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A final consideration: Who will manage your estate?
If your written will is to be administered in a way that faithfully reflects your inner will, you should think carefully about whom to designate as your executor. You can choose your spouse, a relative, or a trusted friend or advisor whose age and circumstances make it likely that he or she will be available to serve when needed.
You can also choose an institution such as a bank. Although an individual may be willing to serve without pay and is likely to be more attuned to your wishes and family needs, an institution probably has more expertise and also has the advantage of neutrality in case of family disputes. It is important that you have confidence in the competency, trustworthiness, and sensitivity of your personal representative and that representative be able and willing to serve.
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For Further Help
We sincerely hope these thoughts and suggestions will be useful as you write or revise your will. For further guidance, please call our Planned Giving and Endowments office toll-free at (800) 549-2666 or contact us by email at plannedgiving@calpoly.edu.
(You should consult your attorney about the applicability to your own situation of the legal principles described here.)
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