Planned Giving
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they are withdrawn, but this has allowed more dollars to be invested for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tax bracket when the funds are withdrawn (for example, during retirement)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 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 Southern Coos Health
Foundation as a beneficiary (it
can be a contingent beneficiary after the death of a spouse - see sample
bequest language), funds pass to Southern Coos Health Foundation
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 Southern
Coos Health District as well.
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