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UK Philanthropy Gift & Estate Planning

Make the Most of Your
Retirement Plan Assets

Avoid Taxation and Create Significant Impact

Did you know that retirement accounts are exposed to federal income taxes that could be as much as 37 percent upon your death? The good news is that these taxes can be eliminated or reduced through a carefully planned charitable gift.

Consider leaving your loved ones less heavily taxed assets and leaving your retirement plan assets to the University of Kentucky for a scholarship or program most meaningful for you. As a nonprofit organization, we are tax-exempt and will receive the full amount of what you designate to us from your plan. You can take advantage of this gift opportunity in several ways, illustrated on the following pages.

Retirement Plan Assets

3 Ways to Donate Your Retirement Account

1

List UK as a beneficiary of your account.
The simplest way to leave the balance of a retirement account to the University of Kentucky after your lifetime is to list UK as the beneficiary on the form provided by your plan administrator. If you are married, your spouse must sign a written waiver if you would like to make the gift upon the passing of the first spouse. Or, simply name UK to receive the gift after both spouses have passed.

2

Make UK a contingent beneficiary.
If you prefer to make your spouse the primary beneficiary of your retirement account, you can name the University of Kentucky as the contingent beneficiary. Want your children to benefit, too? Designate a specific amount for UK with the remainder for your children.

3

Give from your IRA.
If you are 70½ years or older, you can give any amount up to $100,000 from your IRA directly to a qualified charity such as the University of Kentucky without having to pay income taxes on the money. Beginning in the year you turn 72, you can use your gift to satisfy all or part of your required minimum distribution.

Retirement Plan Assets

Example: Tax-Smart Planning

Longtime donors with a $1.5 million estate wish to leave the University of Kentucky a gift valued at $750,000  to endow a scholarship fund for students from the community where they live. They also want to leave something to their only daughter who is in the 32 percent federal income tax bracket. Take a look at the options.

Option 1: Our donors divides assets equally between the daughter and UK.

Daughter UK
IRA $375,000 $375,000
Other assets (house, securities, cash) $375,000 $375,000
Federal income tax owed ($120,000) ($0)
Net amount to beneficiary after taxes $630,000 $750,000

Option 2: Our donors names UK the beneficiary of retirement plan assets and leaves the daughter all other assets.

Daughter UK
IRA $0 $750,000
Other assets (house, securities, cash) $750,000 $0
Federal income tax owed ($0) ($0)
Net amount to beneficiary after taxes $750,000 $750,000
Retirement Plan Assets

Next Steps

For more information, please seek guidance from an estate planning attorney, a CPA or other tax professional. We would be happy to answer any questions regarding charitable giving that you or your advisors may have. Feel free to contact us at no obligation.

Gift and Estate Planning
Phone: (859) 257-7886
Email: giftandestate@uky.edu
Sturgill Philanthropy Building
Lexington, KY 40506-0015

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Retirement Plan Assets

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Someone from the University of Kentucky will be in contact with you soon. If you need to speak to us immediately, please call us at (859) 257-7886.