The Legacy Society
at WCSU welcomes alumni and friends who have included Western in
their estate plans through a will, trust, retirement plan, life
insurance policy, or life income gift. The University and Foundation
recognize that your specific bequest intentions are a personal matter and you
may wish to keep them confidential. However, we ask that you please
consider allowing us to acknowledge your support during your
lifetime so we can share the news of your planned gift, encouraging others
to come forward and join you in supporting Western. For questions
concerning bequests and planned giving, please contact Jane von
Trapp, director of development, at 203-837-8419 or
firstname.lastname@example.org or visit
the WCSU Planned Giving website.
Did you know that retirement accounts are exposed to income taxes
that could be 35 percent or higher upon your death? Estate taxes
could consume even more. The good news is that these taxes can be
eliminated or reduced through a carefully planned charitable gift.
How retirement accounts are taxed.
Qualified retirement plans
receive favorable income tax treatment during your lifetime. No
income tax is owed on the funds as they are contributed, and no
income tax is owed on the earnings and appreciation while in the
plan. You pay taxes on the funds only when you withdraw them. The
balance left in your qualified retirement plan, however, is subject
to estate taxes when you die. And giving the account balance
to individual heirs exposes them to income taxes up to 35
percent on the funds. Your retirement dollars can be seriously
depleted by this double taxation.
Do more with your retirement account.
Other strategies come into
play when deciding to use retirement plan assets for charitable
giving. Upon death, your account can pass directly to WCSU as your
primary beneficiary. Or, it can be used to pay an income to someone
you name for his or her lifetime, after which the remaining assets
pass to Western.
Bill is considering adding a charitable bequest to WCSU in his
will, with the residue of his estate passing to his children. If he
decides instead to name WCSU as beneficiary of his profit-sharing
account, the death benefit passing to the University will qualify
for the estate tax charitable deduction, and it will also pass free
of any income tax obligation. His children will benefit from this
change because, rather than getting the profit-sharing account
proceeds that are subject to income and possibly estate taxes, they
will receive other assets of his estate that are free of taxes.
Provide income for life for a loved one.
possibility is to give retirement assets at your death to a
tax-exempt deferred giving plan, such as a charitable remainder unitrust or a charitable remainder annuity trust. You designate who
will receive income for life from the trust. The income can be
either fixed or variable—whichever you choose. After the death of
your income beneficiary, the remaining balance will support Western.
By naming a deferred giving plan as the ultimate beneficiary of your
retirement account, income taxes can be deferred until paid from the
trust to the income beneficiary you designate. The simplest way to
leave the balance of a retirement account to us after your lifetime
is to list us as the beneficiary on the beneficiary form provided by
your plan administrator. If you are married, your spouse must sign a
written waiver (even though you may designate a charitable
organization as beneficiary on your employer's forms). A waiver is
not required for IRAs, however. If you prefer to make your spouse
the primary beneficiary of the retirement account, you can name WCSU
as the contingent beneficiary. For your children to benefit, you
could designate a specific amount to be paid to Western before the
division of the rest among them.
For more information, please seek guidance from an estate planning attorney, a CPA, and
other professionals who are thoroughly versed in this area of tax
law, because the laws vary depending on when and how you make the
Copyright: The Stelter Company, All rights reserved. For legal or
tax advice, please consult an attorney. Figures cited in examples
are for hypothetical purposes only and are subject to change.
References to estate and income taxes apply to federal taxes only.
State income/estate taxes or state law may impact your results.
photo: Newly inducted Legacy Society member Lea Neylan, who
donated an IRA owned by her late daughter, Gail P. Shaker, received
pin last spring from President Schmotter, also a Legacy Society