Name a charitable beneficiary for retirement assets

Naming Kern Community Foundation as a beneficiary of your retirement plan is not only easy to do, it is also a way to make a significant and lasting gift to our community that may not be possible during your lifetime.

Why designate retirement assets for charity

If you are concerned with potentially high estate taxes, the charitable beneficiary designation is a good choice because the benefit payment is generally excluded from your estate for tax purposes. And, because you may change the beneficiary designation at any time, your decision is revocable.

How to designate a retirement plan beneficiary

You can designate the Foundation as a beneficiary of your retirement plan, whether it is a 401(k), 403(b), IRA, or other qualified retirement program. These assets could be taxed at high rates upon your death. Estate taxes may be due in addition to the taxes your heirs may pay on the income in respect of the decedent. For these reasons, many advisors recommend retirement plan assets as the first to be designated for charitable purposes.

For a taxable estate over $3 million, the combination of estate and income taxes will frequently exceed 75% of the total amount—even more if the generation-skipping transfer taxes are triggered. At a cost to your heirs of only 25% of the fair market value of these type of assets, you could apply 100% of the assets to a named charitable fund to accomplish your specific charitable objectives.

Although your retirement plan beneficiary form overrides your will, it is important that both documents are up-to-date and consistent.

Does a free, personalized analysis of your charitable assets giving and objectives sound helpful? Contact us and we can "run the numbers" on a variety of scenarios. We can also work in tandem with your financial advisor.