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The Upside of Downsizing

It might sound cliché but sometimes having less really is more.

Case in point: clearing your garage of clutter so you can finally park your car in it. Or discovering a perfect-fitting pair of jeans amid the ones you finally got rid of because you hadn’t worn them in 10 years.

Sometimes possessions no longer serve their intended purpose and we need that extra push to get organized and simplify our lives. No matter where you are in life, downsizing can be beneficial. Here are some easy ways to get started:

  • Reflect on what’s important. It’s easy to get overwhelmed by the sheer volume of items. Prioritize what has personal and financial value and weed out the objects with little meaning or use to you. Start small, rather than tackling your entire home at once. By decluttering, you may also gain peace of mind.
  • Decide who can benefit the most. Does another family member treasure your mother’s heirloom jewelry more than you? Can a charity use clothing or furniture you no longer want? Donating assists those in need, and being generous is an act you can feel good about.
  • Simplify your living situation. Determine what you really need at this stage of your life. Do you need an extra vehicle if both you and your spouse are no longer working? If you’re an empty-nester, moving to a smaller home can reduce your overall expenses, including mortgage payments and insurance costs. With less maintenance, you may find that you have more time for the activities you love. And by reducing your bills, you may have more money to spend during retirement, as well as share with others.

Get Your Financial House in Order

As you look at ways to downsize your possessions, remember to clean up your estate plan, as well. Address any life changes that may have occurred since you created or last updated it.

Some examples:

  • Your family. With births, deaths, marriages or divorces, you may want to add or delete beneficiaries or adjust their shares of your estate.
  • Your property. Events such as growth (or decline) in the value of your estate, the acquisition of a new home, or the sale or gift of property may necessitate changes to the provisions in your will.
  • Your new location. Your will should be updated if you move to a new state. Different requirements for the execution of a will, state inheritance taxes and probate laws may make revisions necessary. Contact an estate planning attorney in your new state.
  • Your charitable interests. Will your good work continue after your lifetime? Consider including a bequest to Hospice of the Valleys by designating a percentage of your estate to us, naming us as the beneficiary of a life insurance policy you no longer need or making a tax-free gift from your IRA to support our mission.

The Art of Downsizing

As you downsize your material possessions, think about how you can upsize your giving to Hospice of the Valleys. If making a gift to our organization makes sense, contact Gina O’Bryant at gobryant@hovsc.org and (951) 200-7800 to discuss your giving options.

eBrochure Request Form

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A charitable bequest is one or two sentences in your will or living trust that leave to Hospice of the Valleys 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 Hospice of the Valleys, a nonprofit corporation currently located at 25240 Hancock Ave. Suite 120, Murrieta, CA 92562, 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 Hospice of the Valleys 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 Hospice of the Valleys 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 Hospice of the Valleys 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 Hospice of the Valleys where you agree to make a gift to Hospice of the Valleys 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.

Personal Estate Planning Kit Request Form

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