Gifts of Retirement Plan Assets: Getting Started
Want to get the most value from your nest egg, protect your heirs from heavy taxes and make your mark at our organization? Consider leaving a portion of your retirement plan assets to Pacific Lutheran University.
How It Works
If you die with retirement plan assets in your estate, those assets are subject to income taxes. This can reduce the amount that normally would be passed to heirs by up to 39.6 percent. In contrast, as a nonprofit organization, we are tax-exempt and eligible to receive the full amount and bypass any federal taxes. Income taxes can be eliminated or reduced through a carefully planned charitable gift. Consider these gift options:
- Designate Pacific Lutheran University as the primary beneficiary for a percentage (1 to 100 percent) of your retirement plan assets.
- Designate a specific amount to be paid to us before the remainder is divided among family beneficiaries.
- Make us the contingent beneficiary to receive the balance only if your loved one, as primary beneficiary, doesn't survive you.
If your children are the beneficiaries of your IRAs and other retirement plan assets, federal income taxes may erode up to 39.6 percent of the amount they receive.
To implement your wishes, simply advise your plan administrator of your decision and sign whatever forms are required.
How You Benefit
Leaving retirement plan assets to Pacific Lutheran University shields your heirs from taxes on the retirement assets and frees you to give them other assets that are not as heavily taxed.
Betty plans to leave $250,000 to her niece, Lisa, and $250,000 to Pacific Lutheran University. Among her assets, Betty owns a $250,000 IRA. If she leaves the IRA to Lisa, it will be subject to income taxes at Lisa's marginal income tax rate (35 percent). To avoid her niece having to pay these taxes, Betty names us the beneficiary of her IRA and leaves less tax-burdened assets to Lisa. Because Pacific Lutheran University is tax-exempt, income taxes are eliminated.
|Download a free guide to learn more about gifts of retirement plan assets.|
You can also consider creating a charitable remainder trust for heavily taxed retirement plan assets. Such a trust could be set up to receive the proceeds of your retirement plan at your death. The trust would pay income for life to a family member of your choosing, after which the remaining assets pass to Pacific Lutheran University.
|Use our gift calculator to see how a charitable remainder trust can benefit you.|
Getting Started | Is This Gift Right for You? | Case Study | How to Complete Your Gift | Action Items
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.