Planned Giving: Gifts of Retirement Plan Assets
Many individuals hold a significant amount of their wealth in retirement accounts, such as a 401(k) or IRA. Although the assets in these accounts grow tax-free over time, they have significant built-in tax liability. Naming heirs as beneficiaries of your retirement plan accounts will subject the retirement plan to income tax, and, perhaps federal estate tax. In cases when both taxes apply, as much as 70 percent of your retirement plan's value could be eroded.
Because Manchester University is a tax-exempt charity, naming the University as beneficiary of your retirement account avoids both income and estate taxes. The significant tax savings from naming Manchester as beneficiary of your retirement account can preserve a larger overall estate for your heirs.
This type of estate planning can be complex. Our planned giving staff would be happy to discuss your ideas and goals with you and your advisor.
For more information, contact:
Stephen Thomas, director of gift and estate planning