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You Can Make a Legacy Gift Without Changing Your Will

Posted May 2019

Possibly you are thinking about making a legacy gift to our organization, perhaps for a named endowment. However, you have recently updated your will and you hesitate to take the time and incur the expense of revising it again. If that is the case, there are four simple ways you can make the gift while leaving your will intact.

1.  You can leave to us all or a portion of what remains in your IRA or other retirement plan, such as a 401(k) or 403(b). It could be a percentage of the balance or even the entire amount if you have no heirs or have otherwise provided for them. This is probably the most tax-efficient end-of-life gift you can make because the gift will be subject to neither income nor estate tax. If you leave retirement funds (other than in a Roth IRA or comparable plan) to individuals, they will pay income tax on the distributions—and depending on the size of your estate, the fund balance could also be subject to estate tax. To make a legacy gift in this manner, you simply request a beneficiary form from the custodian of your retirement plan and complete it.

2.  You can name us beneficiary of all or a portion of the proceeds from a life insurance policy. You may have purchased a policy years ago to provide income security for family members or to secure a debt when you were starting a business, but the policy is no longer needed for those purposes. The procedure for giving life insurance proceeds is similar to that for giving remaining retirement funds. Request a change-of-beneficiary form from the insurance company and designate on it what portion of the proceeds our organization will receive.

3.  You can establish a pay-on-death (“POD”) account at your bank. This involves completing a form on which you instruct the bank to pay us all or a portion of what remains in the account at the end of your life.

4.  You can establish a transfer-on-death (“TOD”) account at your brokerage firm. In this case the form you complete would direct the firm to transfer all or a portion of investments held in the account at the end of your life.

Just as you can change your will or living trust at any time—removing and adding beneficiaries and altering the amounts payable to each—you also reserve the right to change any of these beneficiary arrangements if your circumstances change. Because the gift is revocable, you do not qualify for a current income-tax charitable deduction. However, whatever amount we may receive is deductible for estate-tax purposes if such a tax is applicable to your estate.

If you want your legacy gift to establish an endowment or to be used for any designated purpose, you should inform us so that we can record your intentions in a written document. This does not preclude you from future beneficiary changes, but it does ensure that whatever we receive will be used as you intended. Also, we welcome the opportunity to acknowledge and thank you.

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