Beneficiary Designations

Beneficiary Designations: Qualified Retirement Plan Assets

Such an asset can make a wonderful testamentary gift to Maryville University. Retirement plans can produce IRD (Income in Respect of Decedent) issues when left to individual heirs, other than a spouse. Retirement plans are subject to both estate taxation, at the decedent’s estate tax bracket, and income taxation, at the heir’s income tax bracket. As a result, a substantial portion of the retirement plan assets can be diminished before being received by the heir.

When retirement plans are left in whole or in part to Maryville University, Maryville receives the all you have directed to it, without any reduction for taxes, because Maryville is a tax-exempt entity. Non-IRD assets, such as long-term appreciated securities or real estate, can be left to individual heirs without any income tax issues, and the heirs will receive the non-IRD assets with a stepped-up basis. Retirement plans can also be used to fund a testamentary Maryville University Charitable Gift Annuity or a testamentary charitable remainder trust for Maryville University.

Beneficiary Designations: TOD (Transfer on Death) & POD (Payable on Death)

One can name Maryville University as beneficiary of accounts at financial institutions and securities firms. These are commonly referred to as a POD (Payable on Death) designation in the banking industry, or as a TOD (Transfer on Death) designation in the securities industry. The full fair market value of funds or securities transferred to Maryville in this way qualifies for an estate tax charitable deduction.

Beneficiary Designations: Charitable Gift of Life Insurance

Maryville University can be named the primary or secondary beneficiary of one’s life insurance policy. Whatever amount is received by Maryville will qualify for an estate tax charitable deduction. If someone irrevocably transfers ownership of a policy to Maryville University, that person is entitled to an income tax charitable deduction for the lesser of the policy’s fair market value or the net premiums paid.

Life insurance can also be very instrumental in replacing the value of assets used to make a charitable gift. Often times the savings generated by the income tax charitable deduction for the gift will be used to purchase a life insurance policy on the life of the donor(s). When placed in an irrevocable trust, the value of the policy can pass both income- and estate- tax-free to heirs.

For more information, contact Mark R. Roock, CFRE, Director of Development, at 314.529.9674 or 1.800.627.9855, ext. 9674 or mroock@maryville.edu. You should consult your own professional advisors before making a charitable gift.