Gifts of Retirement Assets
(Complete gift description)

These days more and more companies are offering qualified retirement plans that allow employees to defer paying taxes on a portion of their income until the assets are withdrawn. Commonly known as 401(k), 403(b), and Keoghs, these plans, like the traditional Individual Retirement Account (IRA), offer a substantial benefit during one’s lifetime.

Still, the tax will be paid at some point—by your estate and your heirs…unless contributed to the College. Consider this scenario: When you plan your estate, it may seem natural to automatically designate a child or other relative as the successor beneficiary of the account after your death, then use other assets to make a charitable gift to The American College. However, by making a gift of retirement assets to us and other assets to your heirs you may actually be able to give them more – with less. Click here to see an example.

Why is this plan better for the College ?

Since we are a non-profit organization, we won't pay income tax on the distribution (nor will the gift be subject to estate tax); This means the entire amount becomes available to us; meanwhile your heirs will receive other assets of your estate without the burden of extra taxes. By making a gift of retirement assets to the College you are, in essence, receiving double benefits.

Can I use retirement assets to fund a charitable life income arrangement?

You can certainly do so through your estate; however we strongly encourage you to seek competent counsel in this area if this is a consideration. If you are considering a lifetime transfer of retirement assets to such a plan you will need to withdraw your assets, pay the required taxes, and then contribute them to a life income arrangement. Of course you will receive a charitable deduction that will, in part, offset the taxes you owe. (We are hoping for the passage of bill soon that would make lifetime transfers easier.)

What other points should I keep in mind?

Be sure to direct the gift to the College your plan's beneficiary designation form – rather than through your Will. If you do not do so, the assets will be included in your taxable estate

Don't use the balance in your retirement account to satisfy a specific dollar-amount bequest already in your will. Your estate will be treated as having received taxable income in the amount of the bequest paid by the retirement plan assets.

You may make the College a partial beneficiary of your plan and direct the balance to your heirs.

How Do I Make a Gift of my Retirement Account Assets?

Be sure to get the advice of your plan administrator and an attorney expert in retirement planning and charitable gifts. Then call us to ensure that your plans are fulfilled.

For more information

Email us, complete the personal illustration form, or call us at 610-526-1425 so that we can assist you through every step of the process.