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| Saint
Mary's College Planned and Special Gifts 110 Le Mans Saint Mary's College Notre Dame, IN 46556 574/284 4600 Fax 574/284-4749 jamacken@saintmarys.edu Planned Giving |
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Gifts of
Retirement Assets Contributions to retirement plans can provide an excellent opportunity for growth as they grow tax-free, meaning that the growth or earnings are not taxed annually but can continue to grow. The earnings are taxed when they are withdrawn, but this has allowed more dollars to be invested for more growth. Additional savings can occur if the recipient is in a lower tax bracket when the funds are withdrawn (for example, during retirement) than when the investments were growing. Norman and Ruth had often put some of their savings into the stock market. They were also employed by companies that had 401k plans. They kept investing and the value of their plans kept growing. They had long been active in charitable giving - One of their first charitable gifts had been a gift of appreciated stock. Norman: "Our first experience was giving several hundred shares of a stock that had more than doubled in value. We needed some help that year with our tax situation and that gift was a great idea. Also, our tax-sheltered retirement plans kept growing and just recently we rolled them into our IRA. It's grown beyond our wildest dreams." Ruth: "But
taxes will eat up so much of it. Not that we need it all, but we were
hoping to get more value out Norman: "We recently sat down with our attorney to look at our overall financial plans to make sure we had set up our affairs to best suit our needs. Our attorney suggested we consider making a charity a partial contingent beneficiary knowing how much we would like to help others." Ruth: "Tax benefits for our estate, protecting our future, and knowing we're making a difference in other peoples' lives - it feels good!" However, careful planning concerning the withdrawals from retirement funds needs to be done. Not only is there a potential income tax burden, but if there is a balance in your retirement account at your death, there may be estate taxes as well. Estimates are that taxes could eat up as much as 70-75% of retirement assets under certain circumstances. Using qualified retirement plan funds is an excellent source of assets to fund bequests. By designating Saint Mary's College as a beneficiary (it can be a contingent beneficiary after the death of a spouse) funds pass to Saint Mary's College free of taxes. It is possible to set up the beneficiary as the recipient of the entire remaining funds in the account or establish a percentage to fund the bequest. Please note - the designation of any charity as a beneficiary of retirement fund assets cannot be simply written in your will or trust. The charity must be designated as a beneficiary of the retirement plan. There are other strategies in using retirement fund assets to fund charitable gifts. For example, qualified retirement fund assets may be placed in a charitable remainder trust through the use of a Testamentary Trust to provide for children or a spouse. There may be estate tax savings as a result. Everyone's personal circumstances are different, so please consult your tax advisor concerning the use of qualified retirement funds. We would be glad to make suggestions that could be effective in accomplishing you and your family's needs and benefit Saint Mary's College as well. Click here to return to Wills and Bequests. Please note, individual
financial circumstances will vary. The information on this site does not
constitute legal or tax advice. As with all tax and estate planning, please
consult your attorney or estate specialist. All
material is copyrighted and is for viewing purposes only. Use of this
site signifies your agreement with the terms of
use. This Planned Giving section has been developed for Saint
Mary's College by Future Focus.
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©
2004 Saint Mary's College
Development Office
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