Lasting Legacies through Estate Planning

Alison Mathey Lambeth, JD

Alison Mathey Lambeth, JD

I joined Alpha Chi Omega as a freshman at the College of William and Mary in 2003. At the time, I had no idea that five of these sisters would be standing by my side as bridesmaids at my wedding in 2016, or that I would be godmother to two of their children. Fast forward fifteen years, and I am always in awe of the lasting relationships that were solidified through the sisterhood. These ladies encouraged me as I went to law school, studied for bar exams and eventually opened my own law practice. I would not be where I am today without the unconditional support of these women.

This is why I feel so passionate about giving back to an organization that has produced so many fond memories. I want to enable other women to have similar experiences and develop lifelong friendships. I believe it is critical to have the proper estate plan in place that is customized to your needs, while leaving a lasting legacy for your family, friends and organizations that you cherish.

Estate planning helps protect loved ones by allowing them to know your wishes in a simple manner, while bringing a sense of peace and relief in emotional and difficult situations. There are generally four parts of an estate plan: Power of Attorney, Healthcare Directive, Last Will and Testament and Living Trust. If you already have an estate plan, it is important to update these documents to make sure that they remain current, reflect updated changes in the laws and accurately convey your wishes.

A Power of Attorney is a legal document that assigns some or all of your legal rights to an agent who will have the ability to make financial and contractual decisions for you in the event of your incapacity or absence. A Power of Attorney becomes void upon your death, which is why it important to have a trustee relationship in place before death, because a trust will continue after your death.

A Healthcare Directive (also known as a Living Will or Advance Medical Directive) is a legal document that directs a named agent to make decisions about your medical treatment, whether or not to remove or maintain life support, direct the donation of organs and direct the disposition of your remains in the event of your incapacity or inability to make decisions for yourself.

A Last Will and Testament is a legal document which names beneficiaries, executors, guardians of minor children and provides assorted instructions regarding the probate estate. Probate is a legal procedure overseen by the Circuit Court in the county where a decedent last resided. Probate is the lengthy process that transfers estate assets to heirs-at-law upon your passing. Probate can be costly, time consuming and often delays the transfer of assets. All probate assets and information become a public record. A Last Will and Testament alone is often not enough to avoid probate. One of the goals of estate planning is to make things easier on your loved ones and avoiding probate is a way to do so.

By contrast, a Living Trust is a legal document that establishes a fund to be managed by a fiduciary known as "trustee" for the benefit of beneficiaries (family, friends, organizations, charities, you name it!). Many people choose to name themselves as the trustee while they are living in order to still be able to use and control their assets. After all, most Living Trusts are created during your lifetime for your benefit and are "funded" with your assets. In the event of your death or incapacity, you will have chosen a successor trustee to execute your wishes. A Living Trust is normally utilized for the following reasons: avoiding probate, avoiding adult guardianships/conservatorships, avoiding federal estate taxes, having the flexibility to move from state to state, ease of amendment, keeping assets private, sheltering assets from creditors and providing for minor children. When used in conjunction with a Last Will and Testament, the Living Trust becomes the beneficiary of the Will (known as a "Pour Over Will"). A Living Trust is the best vehicle for you to provide for the family, friends and causes that you love, while knowing that your bequest will have a lasting influence.

In summary, there are many benefits to setting up and updating an estate plan. Estate planning provides instructions for your care in the event of a disability before you die. Planning ahead will preserve your dignity by allowing for a person or entity to manage your assets in the event you are unable. Estate planning maintains control over your assets by allowing you to pick who, what and when. Estate planning will avoid unnecessary, undignified and time-consuming processes such as probate, adult guardianship and conservatorship. In short, setting up an estate plan now can provide huge savings by minimizing taxes and eliminating other unnecessary estate costs down the road. I encourage you to utilize an estate plan to leave a bequest to the Alpha Chi Omega Foundation and other organizations that are meaningful to you. Your bequest will have a meaningful, lasting impact and will be appreciated by future generations.

Alison Mathey Lambeth is the principal attorney at Alison Mathey Lambeth Law, PLLC. She is native to the Washington DC Metro Area. Alison graduated from the College of William and Mary in 2007, as a member of the Beta Delta Chapter of Alpha Chi Omega and received her Juris Doctor degree from The Catholic University, Columbus School of Law in 2010. Alison's practice focuses on estate planning, estate preservation, probate and estate settlement. She is licensed to practice law in Virginia, Maryland and the District of Columbia. You can reach Alison at alison@alisonmatheylambethlaw.com or by phone at (703) 772-3125.

*Alpha Chi Omega Foundation neither endorses nor recommends Alison Mathey Lambeth Law, PLLC, and has received not compensation or gift in return for inclusion of this article.

Strengthen the Bonds of Sisterhood

Follow Alison's advice and use your estate plan to enhance the future of the Alpha Chi Omega Foundation. Contact Elizabeth Donaldson at 317.579.5050 ext. 262 or edonaldson@alphachiomega.org to learn more.

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A charitable bequest is one or two sentences in your will or living trust that leave to the Alpha Chi Omega Foundation a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to the Alpha Chi Omega Foundation, a nonprofit corporation currently located at 5939 Castle Creek Parkway North Drive, Indianapolis, IN 46250, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the Alpha Chi Omega Foundation or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the Alpha Chi Omega Foundation as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the Alpha Chi Omega Foundation as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the Alpha Chi Omega Foundation where you agree to make a gift to the Alpha Chi Omega Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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