How To Be a Good Steward Through Estate Planning

As Christians, we are expected to be good stewards of what God has so generously entrusted to our care (Matthew 25:14–30; Luke 16:1–13). Being a faithful steward means using these God-given resources for the glory and service of the Lord, who created and owns everything. One way in which we can be good stewards and leave a lasting legacy for the next generation is with estate planning. This involves, once family is cared for (1 Timothy 5:8), leaving a property or other asset to a non-profit, such as Answers in Genesis. Such a trust leaves a lasting legacy that will impact future generations with the truth of God’s Word and the gospel of Jesus Christ.

Stewardship Estate Planning—Types of Property Ownership

In considering an estate plan, it is important to know how your property is owned, as this can make a huge difference in your plan.

Outright Ownership

One type of ownership, outright ownership or “fee simple” title, occurs when the owner (e.g., a single person) has complete title to the property in his or her name. With this type of ownership, the owner is obligated to personally pay the taxes, mortgage interest, and any other costs of maintaining the property. However, he or she has complete use of the property and may transfer it during life or through their estate to any person or charity.

Tenants in Common

With property held as tenants in common, each person has a separate, undivided interest in his or her portion. In this instance, the taxes, mortgage and insurance payments, or any other costs would be divided between the owners. Each person may make transfers of his or her share of the property during life or through their estate.

Joint Tenancy with Right of Survivorship

Property can be held jointly, and under state law the surviving tenant receives title to the property when the first passes away. Each owner would pay his or her respective share of the taxes, insurance, and the mortgage during life, but the property is transferred by state law to the surviving joint tenant, not according to the will of the first to pass away. For anyone other than a surviving spouse, joint tenancy with right of survivorship may result in an accidental disinheritance.

Separate vs. Joint Property

Property owned by husband and wife, such as a family residence, is often held as a joint tenancy with right of survivorship, so when one spouse dies, full ownership goes to the surviving spouse. But what if, say, a family farm is owned by two brothers who are in business together? One brother is married and the other is single. Is joint ownership appropriate in that situation? Maybe not. If one brother wants to leave a portion of his share to his wife, and the other brother wants to leave a portion to his church or favorite charity, then holding title to the property as joint tenants with right of survivorship would disinherit the wife of the one brother, or the church or favorite charity of the other brother, depending on who survives. This is because under joint ownership with right of survivorship, ownership of the property goes to the surviving tenant when one of them dies, so in either case the estate plan would be totally frustrated by the form of ownership. Under this scenario, separate ownership as tenants in common would be preferable and provide the flexibility needed for their respective estate plans.

Revocable Trusts

It is possible to transfer real estate and other assets into a revocable trust, such as a living trust. Each person deeds his or her portion into the trust. The trustee owns the entire property for the benefit of the income and remainder recipients. The trustee will manage the property, collect income, and distribute it according to the terms of the trust document. A living trust is especially useful if you own property in different states, because this arrangement can help you avoid having to go through probate proceedings in multiple states, thus eliminating estate administration costs.

Charitable Trusts

Transferring real estate or other assets into a charitable trust for the benefit of a non-profit organization such as Answers in Genesis is an excellent way to be a good steward of what God has given you while leaving a lasting legacy. For example, a charitable remainder trust is an arrangement whereby the owner transfers property into a charitable trust; the owner (donor) receives an income interest from the trust, while leaving the remainder interest to the charity to support the work and mission of the non-profit. This arrangement can provide important tax benefits to the donor—it enables the donor to bypass the capital gains tax on the sale of property contributed to the trust, provides the donor with a substantial income tax charitable deduction, and produces income to the donor during the term of the trust (for life or a term of years). At the end of the term, the remainder interest in the trust then serves as a gift to the ministry to support its charitable mission.

Such an estate plan providing a remainder interest to Answers in Genesis would help with spreading the good news of the gospel of Jesus Christ and the message of biblical authority.

You can learn more about planned giving at GenesisGift.org.