Beneficiary Designation

What is a Beneficiary Designation?

An excellent way to make a planned gift is to name the CHRISTUS Stehlin Foundation as a beneficiary of certain types of assets. For example, you may name the Foundation as a beneficiary of your life insurance policy or IRA. By doing so, you quickly and easily create a planned gift that will avoid probate, fulfill your philanthropic goals, and potentially save significant income and estate tax.

Who is Beneficiary Designation For?

Many people own life insurance policies and qualified retirement plans, such as 401(k) plans, 403(b) plans, and IRAs. In fact, these assets in most cases represent a significant portion of a person’s estate. Accordingly, prudent estate planning requires giving careful thought to the eventual distribution of these valuable assets.

Example of a Beneficiary Designation

Mary has an estate valued at $2 million, which includes an IRA of $200,000. She is a long time supporter of the Stehlin Foundation and wants to create an endowed fund honoring her husband. As an alternative to amending her will with a specific bequest, Mary can accomplish the same goals using a beneficiary designation.

Mary can simply fill out a new IRA beneficiary designation form listing CHRISTUS Stehlin Foundation as the primary beneficiary of her $200,000 IRA. Importantly, the IRA beneficiary form — not Mary’s will — controls the final disposition of her retirement account. Fortunately, the form is quick and easy to complete and does not require an attorney. Mary can make the changes herself and submit the form directly to her IRA custodian.

The transfer of Mary’s IRA to the Foundation is also great from a tax standpoint. If left to Mary’s family at her death, her IRA is subject to both estate and income tax – which could be as high as 70 percent! However, if donated to the Foundation, Mary’s IRA will not be subject to either estate or income tax.

More Information

Beneficiary designation forms are a simple but powerful estate planning tool. For more information on beneficiary designation planning, please contact the Development Office at 713-659-1336 or by email.