Office of Development
Planned Giving
Gift of Retirement Assets Can Benefit Donor and St. Francis
Did you know that your retirement plan assets face double taxation? If you leave the assets to your heirs, you will generate "income in respect of a decedent." So not only is the amount diminished by estate taxes, but the recipient also must pay income taxes on it!
If you can make other provisions for your family, there is a better option for your retirement plan assets-a charitable gift.
An Example
Bill is considering adding a charitable bequest to his will, with the residue of his estate passing to his children. Instead, he should consider naming the charitable organization as beneficiary of his profit-sharing account. Then the death benefit passing to the organization will not only qualify for the estate tax charitable deduction but will also pass free of any income tax obligation. His children will benefit from this change because, rather than receiving the profit-sharing account proceeds that are subject to income tax, they will receive other assets of his estate that are free of income taxes.
Benefits
- Naming the University of St. Francis the primary beneficiary avoids all income and estate taxes
- Partial savings when you give The University of St. Francis a specific amount before giving your family the remainder
- Naming the University of St. Francis the contingent beneficiary allows for greater flexibility
- Donating retirement plan assets could be the most cost-effective gift you can make
Be assured that donating your retirement plan assets is not an "all or nothing" proposition. You can name the University of St. Francis the primary beneficiary or the secondary beneficiary; it is also possible to specify a fixed amount for the university with the balance designated for other heirs. If you are interested in this method of making a gift, check with the administrator of your plan for the appropriate form to transfer ownership. Make sure you keep the form with your valuable papers.