Trust Services of the church ( see Trust Services ) utilizes these special methods to help members most effectively remember the Lord’s work in their accumulated assets and estate plans. Trust Services personnel offer qualified counsel in any of these special methods. They are also happy to work with the members’ own professional advisers. The local requirements of each jurisdiction must be carefully considered.
The Christian’s goals might be summarized as (1) to serve Jesus with heart and life, (2) to provide for the necessities of loved ones, and (3) to support the outreach of the church to the larger family of God on earth.
The following legal methods are useful vehicles to accomplish these goals even in death.
Wills. The right to make a will is almost universally recognized. However, each country and jurisdiction will determine what assets may be disposed of by a will and how freely one can name the church as a beneficiary. Most countries allow gifts to the church. In the event a person chooses not to make a will or neglects to make one, local law provides how their assets will be distributed. However, these arbitrary rules of distribution do not make allowance for unique family needs or any gift of gratitude for the Lord’s work. A will can provide more adequately for one’s spouse and children, provide for nominating the guardian of minor children, allow for gifts to the church, and nominate the person to be in charge of all estate assets.
The preparation, execution, and safekeeping of wills are very important. Legal advice should always be obtained to ensure as far as possible that one’s own desires will be carried out.
Charitable Gift Annuities. Charitable gift annuities have been discovered that go back into the late 1800s signed by John H. Kellogg, as president of the International Medical Missionary and Benevolent Association. The General Conference officially endorsed this plan in the early 1900s.
Charitable gift annuities involve a transfer of cash or other property to a conference or other church organizations. In return, the donor receives by contract a specified amount paid usually quarterly during his or her lifetime. In the United States the rates paid are the most recent rates adopted by the Committee on Gift Annuities. This is an organization represented by major charities. In the United States one may get a tax deduction for federal income tax purposes, based on the present value of the amount that ultimately is to pass to the church. In addition, part of the estimated payment for the annuitant’s life expectancy may be excluded from taxation.
Trusts. There are two basic types of trusts: revocable and irrevocable. In both types of trusts, the church has, in the proper situations, served as trustee. This may be done where allowable by local law and where the church will substantially benefit. The cash or property must be delivered to the trustee. The terms written into the trust agreement concern how the trust will be managed, as well as when final distribution will be made. This arrangement will normally avoid the expense and delay of court-supervised administration, as required through the probate of a will.
1. Revocable trusts allow the grantor (church member) to withdraw any or all assets as well as to have full enjoyment of the property during his or her lifetime. At death the assets can flow efficiently to the beneficiaries, including the church, saving probate and administrative costs.
2. Irrevocable trusts cannot generally be changed or revoked after they have been set up.
In the United States, charitable remainder unitrusts and charitable remainder annuity trusts have special tax advantages. Although the principal placed in these trusts cannot be withdrawn, the donors receive a payment. Donors may choose payment for life, or a term up to 20 years, with the payout based on the agreed rate of return, as it relates to the assets of the trust valued each year. The annuity trust payout never varies as long as there are assets in the trust. There is a partial federal income tax deduction for the gift that is deemed to pass ultimately to the church on the death of the donor. An efficient set up also avoids capital gains tax.
Life Income and Other Charitable Agreements. The General Conference operates a “pooled income fund,” which receives the contributions of multiple donors. It is a qualified trust under United States tax law, so donors may receive charitable income tax contribution deduction. The donors cannot withdraw what they contributed to the fund, but receive all the income generated by their contribution during their lifetime. Donors also may designate any Seventh-day Adventist organization to receive the principal amount of their contribution in the fund at the time of their death.
There are also other agreements used effectively through Trust Services for members to remember the church by giving accumulated assets either during life or at death. Special study is now being given to what agreements can be used most effectively in the emerging countries of the world.