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Gifts of Retirement Assets
Contributions to retirement plans can provide an excellent opportunity
for growth as they are invested tax-free. The earnings are taxed
when they are withdrawn, and this has allowed more dollars to be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the funds are withdrawn (for example, during retirement) than when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 of
it."
 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 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 the California Symphony
as a beneficiary (it can be a contingent beneficiary after the death
of a spouse - see sample bequest
language) funds pass to the California Symphony 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.
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 the California
Symphony 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. Donor stories and photographs
are for purposes of illustration only. 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. The content in this Planned Giving section has been
developed for the California Symphony by Future
Focus. Please report any problems to webmaster.
Revised: May 8, 2007 14:14.
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