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.
Making the Sisters of Providence the beneficiary of your retirement plan assets, IRA, life insurance or commercial annuities is easy:
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.
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 |