Beneficiaries of Retirement Funds, IRAs, and Life Insurance

What are Beneficiary Designation Gifts?

Many assets will be distributed upon death according to beneficiary instructions the donor has given during lifetime.  These include primary and secondary death beneficiaries named on various types of company retirement accounts, IRA accounts, life insurance policies, beneficiary deeds, as well as POD and TOD designation on financial accounts.

The Need

Many people would like to increase their support of a church or Christian ministry. However, because of the need to provide for current living expenses and health care costs, they are not able to comfortably make greater lifetime gifts.

The Solution

Donors can retain full ownership and use of property during life and still benefit ministries in the future. They can do so by naming ministries as the death beneficiaries on specific accounts and other assets.

The Benefits

Gift to church or Christian ministries – When the death beneficiary instructions are implemented ministries receive assets in the amount designated by the donor.

Tax Deduction – The assets transferred to charity are not subject to federal estate tax.

Flexible – Donors are able to use and control the assets during their lifetime.

Income Tax Avoidance – Distribution of proceeds from IRAs and other qualified retirement plan accounts may be reportable to the beneficiary as taxable income. Distributions going to a church or Christian ministry will not be taxed provided the ministry is a qualified tax-exempt organization.

Probate Avoidance – Assets transferred to a church or Christian ministry by means of a beneficiary designation pass outside of probate when done properly.