BENEFICIARY DESIGNATIONS
MAKE A BIG DIFFERENCE WITH LITTLE EFFORT
Although many people think of a will as the easiest way to transfer assets after their lifetime, it doesn’t cover everything. In fact, retirement plans, IRAs, life insurance, and commercial annuities are not controlled by the terms of your will, but instead use separate beneficiary forms to determine who receives them. These beneficiary designations pass outside of your will, making them effective and easy ways to leave a legacy.
RETIREMENT ACCOUNT BENEFICIARY DESIGNATIONS
If you want to make a difference in local conservation after your lifetime, consider a tax-wise gift from your retirement plan or IRA. A retirement plan or IRA is typically the largest source of assets that generate taxable income when paid to a beneficiary. Thus, if you are considering a gift to the Land Trust after your lifetime, it is usually better to leave taxable assets to us and give nontaxable assets (such as stocks and real estate) to your loved ones.
To complete your gift, contact your retirement plan or IRA administrator (or visit their website) and complete a beneficiary designation form naming us as beneficiary and the percentage you’d like us to receive (1–100). Then mail it back to the plan administrator and keep a copy for your records. Beneficiary forms are filled out on your terms and can be changed at any time.
Real Life Example
Tom wants to leave TRLT his $100,000 IRA after his death. If he names us as the beneficiary for 100 percent of his IRA, we would receive the entire $100,000 to help protect local land and water. By comparison, if Tom leaves the IRA to his sister, she will owe a sizable amount of the IRA to income taxes.
LIFE INSURANCE BENEFICIARY GIFTS
Life insurance is another asset that could be used to support TRLT, especially when a policy no longer serves its original purpose. These gifts often provide certain tax benefits, and are simple, flexible and have minimal paperwork. The beneficiary designation in your life insurance policy determines where the proceeds will be distributed, therefore are not typically transferred through your will. You can easily change the beneficiary designation of your life insurance policy at any time.
To make this type of gift, you can either contact your insurance provider and request and complete a beneficiary designation form or download the form from your provider’s website. Then mail it back to the insurance company, making sure to keep a copy for your records.
COMMERCIAL ANNUITY BENEFICIARY GIFTS
Like retirement plans and IRAs, commercial annuities come with heavy tax burdens, taking a large chunk out of the payment made to your named beneficiary. The income tax is due on the growth of the annuity—i.e. what its value is worth when you die, versus the amount you paid for it. This tax burden makes such assets another popular choice to leave to a tax-exempt organization like Three Rivers Land Trust.
Just like the process for making gifts of retirement plan assets and life insurance, to complete a gift from your commercial annuity, contact your bank, insurance company or financial institution for a change-of-beneficiary form for the annuity. Decide what percentage of the annuity’s value you would like the Land Trust to receive and name us along with the stated percentage on the beneficiary form. Then mail it back and keep a copy for your records.
We Are Here to Assist You!
If you would like to learn more about planned giving options, we would be happy to answer any questions you have. Please consult your attorney and your tax or financial advisors as well. Your attorney or financial advisor can also get in touch with us. All information regarding your charitable contribution will be held in the strictest of confidence.
Information on this page is for educational purposes and not considered tax or legal advice. Please consult with your professional advisor while making charitable plans. Three Rivers Land Trust is a 501(c)(3) nonprofit organization.