Retirement Plans

Retirement Plan Assets

Tax-deferred retirement plans, such as IRAs, 401(k) and 403(b) accounts are a major factor in financial and estate planning as well as gift planning due to their tax-deferred nature. Since the tax is deferred on these assets, at death they are potentially subject to both estate taxes and income taxes. If the transfer of the retirement accounts to the surviving family members is not handled properly, the retirement assets could be subject to as much as a 65% combined tax.

As a result of this tax pitfall, giving from your investment in a retirement plan can be one of the best planned gifts you can make to MidAmerica. Since MidAmerica is a tax-exempt organization, the retirement plan assets avoid both estate and income taxes, thus preserving more of the asset for the support of the ministry of the university. However, under current law, retirement plan assets should not be withdrawn during life to make a charitable contribution since doing so will trigger the deferred income taxes.

Currently, the most efficient way to pass retirement plan assets to MidAmerica is at death by naming MidAmerica Nazarene University as the designated beneficiary on the retirement account documents. The beneficiary designation can be for a fixed dollar amount or a percentage of the retirement account. Lastly, you can insert instructions into your Will or revocable trust stating that charitable contributions should be made first from the retirement plan assets before any other assets are used. Fulfilling charitable bequests with retirement plan accounts avoids the potential taxes on these accounts.

IRA Rollover Provisions

Recent congressional action permits gifts to be made directly from Individual (IRA) accounts. The Federal government now permits individuals over the age of 70½ to make rollover distributions from their IRA account directly to a charitable organization like MNU without claiming any increased income or paying additional tax. To take advantage of this simple and easy way to support MidAmerica, contact your IRA custodian and request an amount be transferred to the University.

For additional information regarding making a gift of retirement plan assets, contact a MidAmerica Nazarene University Foundation representative by calling (913) 971-3607 (Toll free 1-877-496-8668) or by e-mail: {ml0}.

This information is for educational purposes only and should not be considered legal, accounting, or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.