|
Naming Moravian Seminary as beneficiary of all or part of an IRA, retirement plan, or deferred compensation plan can achieve both estate tax and income tax savings. These gifts escape estate tax, and leave for your heirs those assets not subject to additional income taxes.
Retirement plans transferred at death to any individual other than your spouse are subject to estate tax, and any heir of a retirement plan (except the Roth IRA) pays income tax when he or she withdraws plan assets. Your heirs might end up with as little as 25 cents of every dollar from you retirement plan bequest. This tax bite makes a retirement plan among the least desirable assets to leave children but one of the best vehicles for giving to Moravian Seminary.
You can avoid tax problems if you arrange to transfer retirement plan assets at the end of your life to Moravian. Use your retirement plan's beneficiary designation form, rather than your will, to make the gift to Moravian Theological Seminary. This way the Seminary can receive an outright distribution from your retirement plan following your death, without the delays and expenses of probate proceedings. In addition, you can maximize tax savings.
If you plan to leave part of your retirement plan to the Seminary and part to someone else, you may wish to create a separate retirement plan account for the Seminary and one for your heir. Check with your plan administrator and financial advisor for the best arrangement for your needs.
Because it may be many years before Moravian receives funds from a bequest, and the needs of the Seminary change over time, most donors choose to leave their bequests unrestricted to allow Moravian maximum flexibility. However, bequests restricted for a particular purpose or program, such as faculty support or a scholarship fund, are also welcome.
You may wish to add the following language to your restricted bequest: If, in the future, it is the opinion of the Board of Trustees of Moravian Theological Seminary that all or part of the income of this fund cannot be usefully applied to such purpose, the Board of Trustees of Moravian Theological Seminary may use the same for any purpose that will most nearly accomplish my wishes.
|
