IRA and Retirement Plan Beneficiaries  

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Most retirement plans, including 401(k)s and IRAs, are income tax?deferred, meaning that income tax is not paid until the funds are distributed to you in life, or upon your death. This taxation makes retirement assets among the most costly assets to distribute to loved ones.

Because they are subject to income taxes to your beneficiaries, retirement assets make ideal gifts to tax-exempt charitable organizations such as Willamette. Otherwise, the income taxes on retirement assets you leave to your loved ones can be as high as 39.6 percent. This means that an IRA worth $100,000 will be worth only $60,400 by the time it reaches them.

On the other hand, the naming of a charity as the beneficiary of retirement assets upon death generates no income taxes. The charity is tax-exempt and eligible to receive the full amount and bypass any income taxes. This means that in the above example, Willamette would receive the full $100,000 benefit.


eBrochures
Learn more about the tax benefits of leaving retirement plan assets to charity.


eBrochures
Read more about what to consider when choosing beneficiaries for your IRA.


Changing Beneficiaries
To name or change a beneficiary, simply contact the administrator of the IRA or retirement plan for a change of beneficiary form. If you would like to name Willamette University as beneficiary, simply decide what percentage of the plan's value (0–100 percent) you would like us to receive and name us, along with the stated percentage, on the beneficiary form. Then return the form to the administrator of the plan.

For More Information
Consulting an estate planning attorney is a smart investment that can save you and your family money and heartache in the long run. Please seek legal advice before deciding who will get what in your estate plan.