Other Planned Gifts
Retirement Plan Assets
Naming Communities Foundation of Texas (CFT) as a primary or contingent beneficiary of a qualified retirement plan (i.e. IRA, SEP, 401(k), 403(b), etc.) may enable you to make a larger gift than you anticipate.
Withdrawals from these plans are considered by the IRS as “income in respect of a decedent” or IRD, meaning income that was not taxed before a person’s death, and will be taxed afterwards. Thus someone—normally the heirs—must ultimately pay income tax on it.
As a tax-exempt organization, CFT can be the beneficiary of a qualified retirement plan without paying income taxes. Therefore, in determining which assets to contribute to charity, retirement plan assets are often the most tax-efficient choice for your beneficiaries.
Your retirement account's plan administrator (the company that manages the account) can help you designate CFT as a primary or contingent beneficiary on the plan's beneficiary form. We should also document your gift at CFT so that when your plan assets are received, your philanthropic wishes will be clearly specified and will be fulfilled as you requested. This is usually a fairly quick and straightforward process.
Gift of Life Insurance
You can name CFT as a primary or contingent beneficiary of a life insurance policy. If CFT is named both the sole owner and beneficiary of a paid-up policy, you will be eligible for a charitable income tax deduction. Additional premiums that you pay toward a policy contributed to CFT may also be tax deductible.
Retained Life Estate in Property
You can receive income and estate tax benefits by making a charitable gift of your personal residence or other real estate to CFT, even though you keep the right to use and enjoy it during your lifetime. A life estate may be retained for one or more lifetimes for a term of years. An advantage to this approach is that the property will be removed from your taxable estate.
Geri Jacobs, ChFC, CLU
Director of Charitable Gift Planning
Contact me for more information on giving a planned gift.