Retirement Plan Gifts

How It Works

  1. You name Franklin College as the beneficiary of your IRA, 401(k) or other qualified plan.
  2. After your lifetime, the residue of your plan passes to Franklin College tax-free.

Benefits

  • You can escape both income and estate tax levied on the residue left in your retirement account by leaving it to Franklin College.
  • Give the most-taxed asset in your estate to Franklin College, and leave more favorably taxed property to your heirs.
  • You can continue to take withdrawals during your lifetime.
  • You can change the beneficiary if your circumstances change.

Gifts Through Your Retirement Plan

You may consider using retirement-plan benefits to make a significant gift that will support Franklin College. And because of the estate-tax and income-tax treatment of retirement-plan benefits, the cost of your gift to your estate and heirs is often relatively small.
Retirement-plan benefits include assets held in individual retirement accounts (IRAs) and other qualified plans such as 401(k) plans, profit-sharing plans, Keogh plans, and 403(b) plans.

Income taxes on retirement-plan benefits are deferred but not avoided. That means that as these assets are withdrawn during retirement by the account owner or the account owner’s spouse, they are subject to income tax.

In addition, retirement-plan benefits left to children, grandchildren, and other beneficiaries at the death of the account owner are subject to both income tax and estate tax. This combination of income taxes and estate taxes can result in a tax hit equal to 60 percent or more of the retirement-plan benefits.

For example, John accumulates $1 million in retirement-plan assets. Upon his death at age 73, he leaves his assets to his two children. Because of the tax bite, however, the amount John’s children receive, after taxes, could be less than $360,000.

By contrast, John could have left the $1 million to Franklin College, and the entire amount would have been available to create a scholarship or to fund another of his favorite programs.

Giving Retirement Assets During Your Lifetime: Charitable IRA Rollover

If you are 70½ or older temporary legislation allows you to make cash gifts totaling up to $100,000 from your traditional or Roth IRA to qualified charities without incurring income tax on the withdrawal. This is good news for people who want to make a charitable gift during their lifetime from their retirement assets, but have been discouraged from doing so because of the income tax penalty. The current provision is effective through the 2009 tax year only.

Gifts Through Your Retirement Plan

You may consider using retirement-plan benefits to make a significant gift that will support Franklin College. And because of the estate-tax and income-tax treatment of retirement-plan benefits, the cost of your gift to your estate and heirs is often relatively small.

Retirement-plan benefits include assets held in individual retirement accounts (IRAs) and other qualified plans such as 401(k) plans, profit-sharing plans, Keogh plans, and 403(b) plans.

Income taxes on retirement-plan benefits are deferred but not avoided. That means that as these assets are withdrawn during retirement by the account owner or the account owner’s spouse, they are subject to income tax.

In addition, retirement-plan benefits left to children, grandchildren, and other beneficiaries at the death of the account owner are subject to both income tax and estate tax. This combination of income taxes and estate taxes can result in a tax hit equal to 60 percent or more of the retirement-plan benefits.

For example, John accumulates $1 million in retirement-plan assets. Upon his death at age 73, he leaves his assets to his two children. Because of the tax bite, however, the amount John’s children receive, after taxes, could be less than $360,000.

By contrast, John could have left the $1 million to Franklin College, and the entire amount would have been available to create a scholarship or to fund another of his favorite programs.

Giving Retirement Assets During Your Lifetime: Charitable IRA Rollover

If you are 70½ or older temporary legislation allows you to make cash gifts totaling up to $100,000 from your traditional or Roth IRA to qualified charities without incurring income tax on the withdrawal. This is good news for people who want to make a charitable gift during their lifetime from their retirement assets, but have been discouraged from doing so because of the income tax penalty. The current provision is effective through the 2009 tax year only.

Gifts Through Your Retirement Plan

You may consider using retirement-plan benefits to make a significant gift that will support Franklin College. And because of the estate-tax and income-tax treatment of retirement-plan benefits, the cost of your gift to your estate and heirs is often relatively small.

Retirement-plan benefits include assets held in individual retirement accounts (IRAs) and other qualified plans such as 401(k) plans, profit-sharing plans, Keogh plans, and 403(b) plans.

Income taxes on retirement-plan benefits are deferred but not avoided. That means that as these assets are withdrawn during retirement by the account owner or the account owner’s spouse, they are subject to income tax.

In addition, retirement-plan benefits left to children, grandchildren, and other beneficiaries at the death of the account owner are subject to both income tax and estate tax. This combination of income taxes and estate taxes can result in a tax hit equal to 60 percent or more of the retirement-plan benefits.

For example, John accumulates $1 million in retirement-plan assets. Upon his death at age 73, he leaves his assets to his two children. Because of the tax bite, however, the amount John’s children receive, after taxes, could be less than $360,000.

By contrast, John could have left the $1 million to Franklin College, and the entire amount would have been available to create a scholarship or to fund another of his favorite programs.

Giving Retirement Assets During Your Lifetime: Charitable IRA Rollover

If you are 70½ or older temporary legislation allows you to make cash gifts totaling up to $100,000 from your traditional or Roth IRA to qualified charities without incurring income tax on the withdrawal. This is good news for people who want to make a charitable gift during their lifetime from their retirement assets, but have been discouraged from doing so because of the income tax penalty. The current provision is effective through the 2009 tax year only.