Dalton News

Four Easy Ways to Make a Future Gift Without Changing Your Will

You may be hesitating to make a gift to our organization because you don’t want to incur the expense of changing your will.
You may be hesitating to make a gift to our organization because you don’t want to incur the expense of changing your will. Actually, there are numerous ways to arrange a future gift while leaving your current will intact.
  1. You can name us a beneficiary of any portion of the death proceeds from a life insurance policy.
  2. You can instruct your bank to pay us any portion of what remains in your account at the end of your life. This is called a payable-on-death (POD) account.
  3. You can instruct your brokerage firm to transfer to us any portion of investments held at the end of your life. This is called a transfer-on-death (TOD) account.
  4. You can name us a beneficiary of any percentage of the remaining funds in your IRA, 401(k), 403(b), or other defined contribution retirement plan.
In each case you need only request and complete the beneficiary form provided by the financial institution. When an individual or a charity such as our organization is named as beneficiary through one of these arrangements, the proceeds are not governed by your will and are not subject to probate.

However, like the provisions in a will, these beneficiary designations can be changed at any time. You need only complete a new beneficiary form. Adding or removing a charitable bequest requires a will change, though you could do this with a simple codicil (amendment) if the rest of the will still expresses your wishes.

A charitable gift by beneficiary designation, like a bequest in a will, qualifies for an estate-tax charitable deduction and could result in estate-tax savings, depending on the size of your estate. Whether or not you save estate taxes, you will save income tax when you name our organization as beneficiary of remaining retirement plan funds (unless those funds are in a Roth IRA or resulted from after-tax contributions). That is because retirement funds paid to individuals are in most cases subject to income tax—whereas they are not taxed when paid to a charity.

Thus naming us as a beneficiary of a retirement fund can be the most tax-wise way to make a gift as well as being simple and cost-free.

Increasingly, estate assets are transferred to beneficiaries outside of a will. Please contact us for more information about making a future gift without changing your will.
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