Retirement-plan benefits often make an excellent choice for funding a testamentary charitable gift to the UW. Not only will such a gift escape federal income tax, but it will also avoid any potential federal estate tax. This combination of income taxes and estate taxes could result in a tax hit of more than 62 percent of the retirement-plan benefits.
If, for example, you have designated your children to be the beneficiaries of $100,000 of your retirement-plan benefits and your estate is subject to federal estate taxes, your children could lose $40,000 to federal estate taxes and as much as an additional $22,200 to federal income taxes for a total reduction in benefits of $62,200. If, however, you designate the UW as the beneficiary of that $100,000, the full amount will pass to us with no reduction in benefits.
How It Works
- You name the UW as the beneficiary for part or all of your retirement-plan benefits.
- The funds are transferred by the plan administrator at your death.
Benefits
- No federal income tax due on the funds that pass to the UW
- No federal estate tax on the funds
- A significant gift for the UW programs you support
Important: call or email us to tell us of your intent. We will assist you with the details of the transfer.
Next Steps
- Contact us to learn more about this gift plan or other options.
- Request an e-Brochure with more information about this gift (brochure title: Charitable Tax Planning with Retirement Funds)
