Suggested ways to make a bequest
1) Have a will. In some states, you can get a will from Office Depot, Staples or any stationery store. In others, you need to see an attorney. The KFA cannot give legal advice, first because we are not attorneys, and we cannot recommend any specific attorney because it would be a conflict of interest, as we would be one of the beneficiaries of your bequest. The bequest should refer to:
Krishnamurti Foundation of America
P.O. Box 1560
Ojai CA 93024
attn. Troy Sumrall, Margaret Mistele and Sandra Torres
(KFA's Chief Operating Officer, Chief Financial Officer and Business Manager)
2) Create a POD account. These are easily set up at banks. This link is from the FDIC.
Payable-on-Death (POD) Accounts:
These accounts, sometimes called testamentary, Totten trust or in-trust-for accounts, can be set up at a banking institution with a simple, written declaration from you (usually on the "signature card" in the bank's records) that the funds will belong to one or more named beneficiaries upon your death. If properly titled, a traditional certificate of deposit (CD), other savings account or even a checking account can be set up as a POD account.
POD accounts and living trusts (described in the next section) are both types of "revocable" trust accounts, which are relatively flexible types of trust accounts in which the depositor retains the right to revoke the trust. "The word 'trust' suggests there are limits on your use of the money, but there are no real limits," says FDIC attorney Christopher Hencke. "The money is still yours to spend, save or invest, and you can even change your mind about who should inherit the funds."
Perhaps the biggest reason people establish POD accounts (and other accounts described in this article) is that, upon the death of the owner, the assets often can pass to loved ones without going through probate, which is the process of distributing your assets through an estate administrator. Avoiding probate can minimize delays, legal expenses or other potential problems (such as a contested will) in transferring assets to heirs. Depending on your state's laws, though, it's possible that a POD account may still be subject to the requirements in your will and probate proceedings.
Also, a POD account, unlike a living trust and certain other trusts, is simple and easy to establish, and there's no need to pay an attorney to draw up a formal trust document. "The simplicity of the payable-on-death account makes it the most common type of revocable trust account," says FDIC attorney Joe DiNuzzo. "A POD account has no trust agreement — the only documentation is the bank signature card on which the owner designates the beneficiaries."
Yet another attraction of a POD account (as well as a living trust) is that, in most cases, the FDIC's rules provide additional insurance coverage beyond the basic type of bank account. Here's how. Even though the depositor is recognized as the owner of the funds, the FDIC insures POD and other revocable trust accounts (including living trusts) up to $100,000 for each "qualifying" beneficiary ($200,000 if there are two qualifying beneficiaries, $300,000 if there are three, and so on). Which beneficiaries qualify? Under the FDIC's rules, they are a depositor's spouse, child, grandchild, parent or sibling. Stepparents, stepchildren, adopted children and similar relationships also qualify.
What happens if you name a non-qualifying beneficiary, such as a niece, nephew, cousin, in-law, friend or charitable organization? The portion payable to a non-qualifying beneficiary would be added to any accounts you have at the bank in the single (or individual) account category and that total will be insured to $100,000. Example: A $200,000 POD account naming the owner's two nieces as the beneficiaries would not be insured in the revocable trust category. Instead, the $200,000 would be insured as the depositor's single-ownership funds. The $200,000 would be added to any other single-ownership funds the depositor has at the bank and the total would be insured for $100,000.
If a POD account is owned by two people, FDIC insurance will be determined as if each co-owner had a separate account. This means if two parents have a joint POD account naming their three children as beneficiaries, it would be insured up to $600,000 (with $300,000 assigned to each parent).
These revocable trust accounts also are separately insured from any other accounts (individual, joint, retirement) that a depositor has at the same institution. But be aware that the POD accounts and other revocable trust accounts you have at one institution, including any living trust accounts, are added together for FDIC insurance purposes and covered up to $100,000 per qualifying beneficiary. For example, if a father has a POD account naming his son and daughter as beneficiaries and he also has a living trust account naming the same beneficiaries, the funds in both accounts would be added together and the total insured up to $200,000 ($100,000 for each qualifying beneficiary).
3) A third kind of account works the same as a POD account but is for securities. It’s called a TOD, or transfer on death, account. Most brokerage firms can set them up for you. Other than the nature of the bequest (bank CDs or securities) there is little difference between POD and TOD accounts. Some states do not allow for TOD accounts however, unless the brokerage firm account is in a different state, one that does allow TOD accounts.
4) Name KFA as the beneficiary of your retirement plan or life insurance policy. You can do this by requesting a change of beneficiary form from your retirement plan administrator or insurance company, completing the form naming KFA as your beneficiary, and returning the form to the plan administrator or insurance company.
Again, we are not offering legal or tax advice. We are pointing to the simplest methods of leaving a bequest to the KFA or any other person or entity you may wish to bequeath assets on your death.
To discuss making a bequest to the KFA or Oak Grove School, please contact Troy Sumrall.
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