In this issue of Christian Steward, we are dealing with one of the most important aspects of giving, and one of the most rewarding: giving to the poor.

As we look into the Word, we trust that this will only be a beginning of your search of God's Word on this important aspect of your giving lifestyle.

And while we realize it is controversial, many individuals have strong feelings that they should be allowed to die with dignity, when diagnosed with a terminal illness. In this issue, we will explore a way to express your desires.

Thank you again for this opportunity to be of service. We trust that by now you know it is our desire to serve you in your gift planning, as well as in your total estate design.

"A generous man will himself be blessed, for he shares his food with the poor." (Proverbs 22:9)

This verse is from the writings of Solomon, probably the wisest man who ever lived. He saw the wisdom in being generous with the poor.

Solomon also said, "He who giveth to the poor, lendeth to the Lord, and the Lord will surely repay him generously." In Deuteronomy 14:29, we find that under the law, a portion of the tithe was for the fatherless and the widows. From the earliest parts of the Old Testament, God made special provisions for the poor.

In His parable about heaven, Jesus said:

"Come, you who are blessed by my father; take your inheritance, the kingdom prepared for you since the creation of the world. For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me . . . I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me." (Matthew 25:34-40)

When you give to the poor, you are giving directly to Jesus.

Another interesting study in giving to the poor is found in II Corinthians 9:8-9, Paul expresses one of the strongest promises in the Word, and it is to the person who gives to the poor.

"God is able to make all grace abound to you, so that in all things at all times, having all that you need, you will abound in ever good work. For it is written, he who scatters abroad his gifts to the poor, his righteousness endures forever."

Giving to the poor should be a part of every individual's lifestyle of giving. There are many kinds of poor:

• those who are poor financially and do not have food, clothing, or shelter, the necessities of life
• those who are poor because they have been starved by society, bound by crime, alcohol or drugs
• those who have not received, because they have not entered into the riches that God has provided, through His gift of eternal life

In reality, all giving, whether to meet humanitarian needs or to take the Gospel into all the world, is giving to the poor.

In past issues, we have discussed several tools available for use in your personal estate planning process. In this issue, we want to look at a tool that can provide important results, but can also be dangerous if not established properly.

The Life Estate Agreement
You can transfer real estate to another individual, maintaining the right to use the property for a period of years or for life. Through this irrevocable transfer, you establish two separate interests, a life estate interest and a remainder interest.

The life estate gives you full use of the property during life, including the right to live in the property or the right to rent it and receive the proceeds of the rental.

Problems With the Life Estate Agreement
When you transfer property to a life estate agreement, the property cannot be sold without the consent of the holder of the remainder interest. And there will be a division of the proceeds, based upon the value of each interest.

For gift tax purposes, the transfer is considered irrevocable and subject to a tax on the value of the interest transferred. Since the transfer of the remainder interest is a future gift, it does not qualify for the $10,000 annual exclusion.

When you maintain the life estate interest, the full value of the property will be included in your estate, though the transfer of the remainder interest may have been treated as a taxable gift.

Using the Life Estate Agreement to Avoid Probate
It is possible to use the life estate agreement only for the avoidance of probate, with no tax implications. By making the agreement revocable, meaning that you have the right to revoke the remainder interest given to a family member, the gift is not complete, and therefore not subject to gift tax.

This right to revoke may be expressed in the life estate agreement itself, or by entering into an option to repurchase the remainder interest from the party to whom it is transferred.

Conclusion
The life estate agreement is complex. It should not be entered into without good counsel. However, when designed properly, it can be a beneficial estate planning tool.

The life estate agreement can also be combined with your charitable interests.

You can transfer the remainder interest in your home or farm to Manhattan Christian College. You can receive an income tax charitable deduction, and still live in or receive the rent from your property for the rest of your life.

The income tax deduction will not be for the full value of your property. The deduction is for the property value minus the value of your right to use the property for life (as calculated using government tables). But many times, the deduction will be for a substantial percentage of the property value.

We have prepared a Special Planning Report, How to Receive a Tax Deduction on Your Home or Farm While You Continue to Live In It. The Report also outlines the advantages of establishing a charitable life estate agreement when you may not need the income tax deduction, but want to avoid probate on the transfer of your property at the time of death.

This Special Planning Report is yours free, with no cost or obligation. We trust that you will take time to write for it.

Much is written today about faith giving. Oswald Smith of the great People's Church, Toronto, Canada, wrote an article about how God taught him to give. And today, many church mission programs are supported by a concept called faith promise giving.

A family we know practices faith giving from a covenant relationship. At the beginning of each year, they calculate their family budget needs for the year, food, clothing, shelter, the necessities and some enjoyments of life.

And figured into the budget is their giving to their local church and other ministries, given from the first fruits of their labors.

They then made a covenant before God that from any additional income that He provides, they will give a percentage, based upon an escalating scale. For example, they give 10% of their income used to cover their family budget.

On everything over their family budget, they give 25% of the next $5,000, 50% of the next $5,000, and 100% of everything above that, with which God prospers them.

God has worked in their lives. But it is not always without problem.

In the second year of their giving program, this family received a sizeable distribution from his corporation. It's not easy to take a large sum of money and give it, when you think in terms of future security. But they did, and they have not been sorry.

When I think of this couple's lifestyle of giving, I am reminded of the verse in Corinthians that states "I have given you much so that you will be able to give much."

Many individuals today have strong feelings about medical practices when an individual has been diagnosed with a terminal illness. Should you become terminally ill and there is positively no hope for your recovery, do you want to be allowed to die with dignity or to be kept alive by artificial means?

Whatever your desires, you should consider a document that expresses your feelings. While this document can be drafted in many different ways, an example reads as follows:

I, <Your Name>, being of sound mind, willfully and voluntarily make known my desire that my life shall not be artificially prolonged.

If I should have an incurable and irreversible condition that has been diagnosed by two physicians and that will result in my death within a relatively short time without the administration of life-sustaining treatment or has produced an irreversible coma or persistent vegetative state, and I am no longer able to make decisions regarding my medical treatment, I direct my attending physician to withhold or withdraw treatment, including artificially administered nutrition and hydration, that only prolongs the process of dying or the irreversible coma or persistent vegetative state and is not necessary for my comfort or to alleviate pain.

This request is made after careful consideration. I hope you who care for me will feel morally bound to follow its mandate. I recognize that this appears to place a heavy responsibility upon you, but it is with the intention of relieving you of such responsibility and of placing it upon myself, that this statement is made.

This is a rapidly changing area of law. Therefore, you should rely upon your attorney to draft your desires according to the requirements in your state.

Should death occur suddenly, there are six things that should be easily found among your personal effects.

These six things are:

1. An up-to-date will and letter of instructions.
2. A list of insurance policies owned, with benefits, special provisions and how proceeds are payable.
3. A list of investments.
4. A list of assets and liabilities.
5. A memorandum of general information and personal data.
6. Instructions for your heirs.

Also, there are some things that should not be found among your personal effects, such as:

1. Any letters, documents, pictures, etc., which you do not want made public.
2. Any lapsed insurance policies, unless they are so marked.
3. Any evidence of worthless investments, outlawed or foreign notes, unless they are so marked.

Why not take time now to make sure that your house is in order. It may save your heirs and beneficiaries time and expenses at the time of your death, and will simplify the process of settling your affairs.

Thank you for allowing us to share with you. You are an important part of our ministry, and it is our desire to serve you.

Please take time to request the additional information on life estates, as discussed in this issue of Christian Steward. We will send it to you at no cost or obligation. We trust that you will allow us this opportunity to be of service.

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