Planning Pointer
Charitable Planning That Keeps Your Options Open: Beneficiary Designations
Published July 2006
If you are concerned about possibly needing your assets for the present or for the future if circumstances change, you might consider making a "revocable" charitable gift. You may change revocable gifts to keep the gifts consistent with your evolving goals and objectives. Last month we explored wills and trusts, but you can also make a revocable gift to Saint Rose through virtually any financial instrument with a beneficiary designation:
- Life Insurance Policies. If the original need for the policy no longer exists or has been addressed in other ways, you may want to consider naming Saint Rose as a beneficiary of your policy. You can split the policy proceeds among more than one beneficiary by giving fractional interests. For example, you might designate one-half for Saint Rose and one-half for your spouse.
- Retirement-Plan Accounts. Many retirement plans continue to have significant value after the death of the plan participant—value the participant can direct to others through beneficiary designations.
Consider naming Saint Rose as a beneficiary of all or a part of any retirement plan in which you participate, including employer-sponsored plans or plans you may have created for yourself, such as an individual retirement account (IRA) or Keogh plan.
If you can leave other assets to heirs, retirement-plan proceeds can make an excellent choice for charitable giving because most or all of the contributions and accumulations in such plans have never been taxed. If you left these funds to heirs, they would have to pay income tax on them. Since Saint Rose is tax-exempt, we would not pay income tax on retirement-plan proceeds. - Pay-On-Death Designations. In many states, it is possible to direct organizations that hold funds for you—such as banks and brokerage firms—to pay any account balances remaining at your death to designated persons or organizations. You can name Saint Rose as a pay-on-death designee of such accounts. Generally, these designations can be changed at any time, so you can be sure that your current designations are in line with your current objectives. Check with your bank or brokerage firm to find out its policy on pay-on-death accounts.
Our next installment will explore how, with some creative planning, you can ensure that your annual gift will continue forever.
If you would like more information about making a gift to Saint Rose through beneficiary designations, please click here.