Make the Most of Your
Retirement Plan Assets
Reduce Taxes 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.
Ways to Donate Your Retirement Account
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
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.
Give from your IRA.
If you are 70½ years or older, you can give any amount up to $105,000 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 73, you can use your gift to satisfy all or part of your required minimum distribution.
Give from your IRA and receive income in return.
If you are 70½ or older, you can make a one-time election of up to $53,000 (without being taxed on the distribution) from your IRA to fund a charitable gift annuity—the gift that pays you. Special rules apply, so contact us for more details and a personalized illustration at no obligation.
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
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 |