This issue of Christian Steward comes to you with our prayer that we are meeting your needs and helping you as you continue to grow and develop your lifestyle of giving.

We believe that at the basis of your lifestyle of giving is the recognition that the property that you possess is not really yours. It is God's, and you are a steward--a trustee, a caretaker--and not an owner of that accumulated wealth. This is our premise for step #5 in developing a lifestyle of giving.

In our step-by-step process, we have:

Step #1: Recognition that the basis of all stewardship is work.

Step #2: We take a percentage of that which we earn from our labors and give it.

Step #3: Our gifts are of the first fruits, upon the first day.

Step #4: God is not only honored, but obligated by His word to prosper and bless us when we follow this system.

Now let's look at Step #5.

God has placed man in a position of stewardship, not ownership, of his accumulated wealth.

Early in the scriptures, we find that God is the owner of all. In Psalms 24:1, the Psalmist declares, "The earth is the Lord's, and everything in it, the world and all who live in it."

And he confirms that in Psalms 50:10-12, "For every animal of the forest is mine and the cattle on a thousand hills. I know every bird in the mountains and the creatures of the field are mine. If I were hungry, I would not tell you; for the world is mine and all that is in it."

This principle is again confirmed in the New Testament, in I Corinthians 10:26, "For the earth is the Lord's, and everything in it."

Does this not mean that our relationship to that property must be that of a steward or a caretaker, and not of an owner?

And with this relationship comes responsibility.

In the parable of the talents, in Matthew 25:14-27, we note that the master distributed his property according to the ability of each servant. And the parable tells us of the steward's responsibility to determine what the owner wished to accomplish, and to carry it out.

From our study of the parable of the talents, we arrive at our definition of stewardship, "Using God-given abilities to manage God-owned property, to accomplish God-ordained results."

When we embrace this definition, it becomes apparent that every financial decision we make is also a spiritual decision.

Whether it's our gifts of first fruits, money we spend for living, or distribution of the property that God has entrusted to us at the time of death, to be found faithful we must determine what the owner wishes to accomplish through us. We must then use our labor and skills to accomplish those results. Only then will we be worthy of His reward, "Well done, thou good and faithful servant."

And this completes the cycle in our development of a lifestyle of giving.

If we use our labor to earn. . .

• take a percentage of that which we earn and give it
• make sure that it is of the first fruits upon the first day -- putting God first in our lives and giving of our best
• recognizing that we are not owners but trustees of that estate that has been accumulated as a result of our labor and God's blessings.

If we have sought His plan for our use of that estate during our lifetimes and its distribution at our deaths, Then we have the framework for developing a lifestyle of giving.

We trust this series has been of interest and value to you, and we pray that these five steps will become an important part of your lifestyle.

In this issue of Christian Steward, we want to look at a simple estate planning tool available to you. It's called a Totten Trust.

Many individuals try to transfer property at the time of death by placing savings or investment accounts in joint ownership with rights of survivorship. But there are dangers in this method of planning.

First, when you place property in joint ownership, the joint owner may have immediate access to the property. And at least part of the property may be subject to attachment under bankruptcy or divorce proceedings.

These dangers are not present with a Totten Trust.

The advantage of a Totten Trust is that at the time of death the money in that account will be distributed to the named individual or charitable organization immediately, outside the probate process.

It can be established simply by notifying your bank or brokerage firm of your desire, and having title on your account changed. Title on a Totten Trust would read:

"<Your name> as trustee in trust for your personal or charitable beneficiary ."

And you can change designation on your account, or terminate the arrangement at any time.

Three words of caution.

A Totten Trust does not provide management of property in case of disability prior to death. This management must be provided by a durable power of attorney or a trust.

A Totten Trust provides no estate tax planning. It is only a will substitute, or probate avoidance device, and cannot be used in tax planning.

It is very important that you coordinate the legal instruments of your estate plan. Distribution from the Totten Trust will be made outside your will. If beneficiary arrangements are not coordinated, the distribution desires you have expressed in your will may not be carried out.

When a Totten Trust is coordinated with the other instruments of your estate plan, and when no tax planning is necessary, it can be a very effective way to transfer property at the time of death, and should be considered in your overall estate planning objectives.

The Totten Trust and Charitable Giving

A Totten Trust is also a very effective way to make charitable gifts. You retain control of the assets during your lifetime, should you need the investment or wish to change your mind. But at the time of death, the investment is transferred to your charitable organization outside of the probate process.

Did we get your attention . . . especially if you have property for sale?

There is a way in which you can make a gift of a partial interest in property that you have for sale.

It's called a bargain sale, and it works like this.

Assume that you own rental property that you purchased for $10,000, and it has a current fair market value of $30,000. You want to make a $10,000 gift to Manhattan Christian College, but do not have the cash to give.

If you sold the property, you would have to pay a tax on the $20,000 capital gain. However, instead of selling the property on the open market and paying the tax, you could sell it to Manhattan Christian College, for $20,000.

We would then sell the property and pay you $20,000. And you avoid the capital gain tax applicable to your gift.

In the right circumstances, this may be an ideal way for you to make a gift to Manhattan Christian College, and simultaneously provide for your financial needs.

For more information on how a bargain sale might work in your circumstances, please call our office. We will be happy to provide you additional information.

Not all examples of a lifestyle of giving have to do with finances. In fact, the most vivid example in my life concerns a man who never really had much of this world's goods to give.

He was a dirt farmer in Kansas.

He farmed with horses in his early years, but was injured by a horse and had to move to a smaller farm. He had some livestock, and an old Ford Ferguson tractor with a haybuck on the front and a dirt scoop on the back. And he kept very busy.

He loved his farm, especially his livestock. But that small farm didn't occupy all of his time. He spent many hours--in fact, too many, according to his wife--working for his neighbors. Whenever someone had a problem or needed help getting crops in, whenever and whatever he could do, he was there helping.

Later in life, that farmer became ill with lung cancer, and spent the last years of his life bedridden. But not a thing on his farm went unattended . . . not a head of livestock was sold, not an ear of corn left in the field.

Neighbors--and there were many of them--took turns caring for the chores, never accepting pay, and almost embarrassed to accept a thank you. They were simply repaying a man for his many years of unselfish giving.

The Scriptures say, "Give, and it shall be given unto you." God was at work through the lives of His people, truly the result of a lifestyle of giving.

We recently read of an individual who took pride in keeping his will up-to-date. Each year it was rewritten to reflect changes in his objectives and financial circumstances. And each year, he found a new hiding place for the current will.

The individual died, but the will that had been signed two months earlier could not be found. As a result, the property was distributed according to the state intestacy laws.

The will was found twelve years later, hidden in a basement tool box. A reading of the will revealed that the property had not been distributed according to the individual's desires.

Naturally, the moral of this story is to make sure that your will is placed with your valuable papers and can be found at the time of your death.

You may desire that part of your estate be distributed at your death to Manhattan Christian College, and other charitable organizations that you have supported during your lifetime. And you may have made sure that this will be accomplished through your will, or the trust instrument which outlines the distribution of your estate.

However, if you guarantee now, during your lifetime, that property will be distributed to charity at the time of your death, you can receive an income tax charitable deduction today, though the actual distribution will not take place until the time of death.

During your lifetime you can maintain the benefit of the property, including the income that it produces. Or if you wish to make a future gift of your home or farm, you retain the right to live in it or farm it.

The result is that you obtain an income tax charitable deduction in the year in which you guarantee the gift, while maintaining the benefit from the property during your lifetime.

And it is even possible to avoid capital gain tax should the property subsequently be sold.

We trust that the information we have shared in this Christian Steward has been helpful and we welcome your questions concerning any area of estate planning. We want to serve you.

And we encourage you to request the Special Planning Report offered, to learn how you can receive a charitable income tax deduction without giving up the benefit from your property. Write for your free copy, today.

© Lifestyle Giving, Inc., 2000. Printed by permission.