Gifts of Retirement Assets
Transfers at Death
The Bad News.
If the ultimate beneficiary of your retirement assets (e.g., your individual retirement account (IRA), 401(k) plan, profit-sharing plan, pension plan, or Keogh plan) is an individual, the beneficiary (even if the beneficiary is your spouse) generally must pay income tax on receipt of the assets. In addition, the assets are included in your taxable estate and may be subject to estate tax if the beneficiary is anyone other than your spouse. Therefore, if your retirement assets pass to your children or other individuals, up to 75% of your retirement assets could be lost to taxes.
The Good News.
By designating Willamette University as beneficiary of your retirement assets, at your death the entire portion designated to the University will go to support the University; no income or estate tax will be assessed against the assets given to the University. Naming the University as beneficiary of retirement assets generally is simple, and usually you can make the designation merely by signing a form supplied by your retirement plan administrator or IRA trustee. Federal law, however, may require additional procedures for married persons.
Lifetime Transfers
Under current tax law, lifetime contributions of retirement assets to charities can be problematic in many circumstances. However, President Bush and many members of Congress have expressed support for proposed legislation that would provide favorable tax treatment for lifetime charitable contributions of retirement assets.
Please contact the Office of Gift Planning at (503) 370-6022 for more information about contributing retirement assets to the University.
The discussion above is general in nature and may not apply to all individuals. Prospective donors are urged to consult their individual tax and financial advisors concerning the specific consequences of making gifts to the University.