Beneficiary Designations
Easy Ways to Leave Your Legacy
Many don’t realize that retirement plans, IRAs, life insurance, donor advised funds and commercial annuities are not affected by a will. These accounts are dispersed according to beneficiary designations. The forms are often easier to update than a will, making them simple ways to leave a legacy.
- Retirement Plan or IRA
Typically this is the largest source of taxable income when paid to a beneficiary. If you are considering a gift, it is usually better to leave taxable assets like retirement plans to the Sisters of Providence and give other assets like stocks or real estate to loved ones. - Life Insurance
A gift of life insurance is a good way to maximize your impact. By naming the Sisters of Providence as beneficiary, your small premium payments transform into a sizable gift. Plus, it is revocable at any time if your plans change. - Donor Advised Funds
A donor advised fund (DAF) gives you flexibility to recommend how much and how often money is granted to the Sisters of Providence and other charities. You can transfer cash or other assets to a community foundation, brokerage house or other sponsoring organization, and in return, you qualify for an income tax charitable deduction for gifts to your DAF. - Commercial Annuity
Annuities are tax-heavy assets. Income tax is due on the growth of the annuity — in other words, what its value is worth when you die over what you paid for it. The tax burden makes these assets another popular choice to leave to a tax-exempt organization like the Sisters of Providence.
How to Make It Happen
Making the Sisters of Providence the beneficiary of your retirement plan assets, IRA, life insurance or commercial annuities is easy:
- Contact the institution that controls the asset for a change-of-beneficiary form. Many have the forms on their website available for download.
- Decide what amount of the account value you would like the Sisters of Providence to receive, between 1-100 percent.
- Name Sisters of Providence of Saint Mary's-of-the-Woods, Indiana as the beneficiary.
- Return or submit the form as directed by the institution.
- Notify the beneficiaries so they can claim the proceeds at the appropriate time.
Keeping Designations Up to Date
Beneficiary designations can be modified at any time. Experts suggest reviewing them every two to three years when reviewing your overall estate plan. This way you can ensure your assets reach the intended recipient(s), even as your needs change.
Consider This Example
Jordan would like to leave the Sisters of Providence a gift after passing, but would also like to leave something for a family member, Pat. Jordan is trying to decide where a $100,000 IRA should go. Naming the Sisters of Providence as the beneficiary for 100 percent means we would receive the entire $100,000 to help fulfill our mission. By comparison, if Jordan leaves the IRA to Pat, a sizable amount of the IRA would be subject to income taxes.
| The value of Jordan’s IRA at death is $100,000. | ||
|---|---|---|
| Chosen Beneficiary | Pat | the Sisters of Providence |
| Federal income taxes (assumes a 24 percent marginal income tax bracket) |
$24,000 | $0 |
| Net amount to beneficiary | $76,000 | $100,000 |
Next Steps
To learn more about the advantages of designating the Sisters of Providence as beneficiary of your retirement plan assets, life insurance, donor advised fund or commercial annuities, or to learn more about changing your designations, please contact the Sisters of Providence today.
Cami Pritchett
Constituent Engagement and Planned Giving Manager
Phone: 812-535-2807
Email: cpritchett@spsmw.org
1 Sisters of Providence
Saint-Mary-of-the-Woods, IN 47876
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.
Contact Us
Cami Pritchett
Constituent Engagement and Planned Giving Manager
Phone: 812-535-2807
Email: cpritchett@spsmw.org
1 Sisters of Providence
Saint-Mary-of-the-Woods, IN 47876