Planning Your Gift
Making Hamilton the Contingent Beneficiary of Your Retirement Plan
Committee on Development
June 6, 2008
During the March meeting, encouraged by Steve Sadove, we discussed outright gifts of cash and appreciated capital assets, such as securities and real property, as well as several planned gift strategies available to alumni of all ages:
estate plan provisions
beneficiary designations, including pension plans, IRAs and insurance policies.
Today, we will focus on naming Hamilton the beneficiary of a portion of a retirement plan, or a contingent beneficiary of a retirement plan.
Retirement plan assets have been a frequent topic at these meetings. Si Keehn and others have noted that perhaps as much as 65 cents of every dollar in an IRA could be consumed by taxes if left to an non-spousal heir. The conventional wisdom has been, and continues to be, to make Hamilton the contingent beneficiary of IRAs and other qualified plans.
Joel Johnson suggested that each trustee be given instructions to make Hamilton the contingent beneficiary of his or her IRA. In response to his request, we provide a sample beneficiary designation form. Exhibit A makes the entire IRA available to the spouse; in the event the spouse dies before the IRA owner, plan assets are delivered to Hamilton free of estate and income tax.
Exhibit B illustrates how an individual can make Hamilton the beneficiary of a portion of an IRA. A spousal consent form also may be required. In this case, 75% of the IRA is left to the surviving spouse and 25% to Hamilton.
Please contact your plan administrator for the correct form and instructions, typically available on-line, to accomplish your philanthropic and personal planning objectives.