Touching Lives: Estate Planning and your Community Theatre |
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Legacy Giving:
Support the Theatre with an Affordable Gift
Support the Theatre with a gift that pays you income
Support the Theatre with a gift that allows you to keep control of your assets |
Including your retirement plan assets in your estate planning
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Retirement plan assets can be heavily taxed if left to heirs. While most inherited assets are free from income tax, they are subject to estate tax. And, your heirs will pay income tax on amounts received from any retirement plans (profit sharing plan, 401(k), 403(b), IRA, etc.). Estate and income taxes can exceed 75% or more of the total amount in a retirement plan!
Including your retirement plan assets in your estate planning can avoid these heavy taxes. As an example, you can have the income from the plan paid to your spouse or someone else for their lifetime with the remaining assets going to your estate and distributed to designated individuals and the remaining portion passing to one or more nonprofit organizations. We hope that you include your Community Theatre in these plans. |
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Why give retirement plan assets to San Juan Community Theatre? |
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- To fulfill a desire to make a major “Touching Gift” to San Juan Community Theatre. It may be that your retirement plans contain a large portion of your net worth and that it would be the only way you could make a donation of the amount you have in mind.
- To reduce your taxable estate. Assets passing from retirement plans to qualified nonprofit organizations like San Juan Community Theatre are entirely removed from your taxable estate.
- To avoid income tax that would otherwise be due. When retirement plan assets pass to heirs, they are subject to federal income tax as well as the federal estate tax. While a credit is allowed to partially avoid double taxation, the cumulative effect of both taxes can reduce the amount that eventually ends up with your heirs by as much as 75%! If you are considering making gifts to nonprofit organizations as well as to your heirs, it often makes sense to give retirement plan assets to charity and other investments to your heirs.
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How to give retirement plan assets to San Juan Community Theatre.
There is more than one way to make such a gift. Which is best for you depends on your individual circumstances. We recommend that you discuss the matter with your advisor before making a decision |
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Outright Gift
If you want whatever remains in your retirement account to pass to the San Juan Community Theatre at your death, simply ask the plan administrator for the appropriate form needed to do this. You then indicate how you wish the remainder to be distributed. If you do name San Juan Community Theatre as a beneficiary, please send us a copy of the form, which we will retain for our records.
Gift in Trust
You may wish your surviving heirs to enjoy the income from your retirement plan before anything passes to San Juan Community Theatre. In that case, you could establish a charitable remainder trust and have the retirement plan assets transferred at your death to the trust. The Trust will make regular payments to the person(s) you designate. These payments will continue either for their lifetimes or for a term of years after your death. Then, whatever remains in the trust passes to San Juan Community Theatre.
A Lifetime Alternative
Another option is to remove assets from the retirement plan while you are living and transfer them to a charitable life-income plan. You name yourself as the income recipient and San Juan Community Theatre eventually gets the remainder. While you must pay income tax when you withdraw the money from the plan, you also are entitled to an income tax charitable deduction for establishing the life-income arrangement. It may be that the life-income arrangement can provide you with more income than the retirement plan, and you remove the asset from your taxable estate. |
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