Retirement Assets

Retirement assets include IRAs, 401(k)s, and TSAs and can be transferred by adding Northwest Christian Community Foundation as either a primary or contingent beneficiary of the remainer of the account.

Benefits of naming Northwest Christian Community Foundation as beneficiary of your retirement plans are:

• Potential estate tax deduction
• Avoidance of income tax to heirs
• Transferring resources without hassle

Northwest Christian Community Foundation would be glad to provide assistance to you and those advising you with your estate plans. For more information about giving retirement assets to Northwest Christian Community Foundation, please contact us at office@nccf4christ.org or 503-892-6264.

Retirement plan assets include IRAs, 401(k) plans, 403(b) plans, TSAs, etc. and can be transferred by naming Northwest Christian Community Foundation as either a primary or contingent beneficiary of the account.  The assets will then not be subject to estate tax or to income tax, and consequently, the entire balance will be preserved for Northwest Christian Community Foundation.  [Example]

Retirement plan assets can also be used to fund a life income gift plan (gift annuity or charitable remainder trust) at your passing.  Your heirs will benefit from the income stream of the planned gift and only a portion of the plan assets will be considered for estate tax purposes.  Northwest Christian Community Foundation will benefit when the planned gift vehicle matures. [Example]

Recent legislation has been it possible to make a charitable gift from your IRA and exclude the gift amount from your gross income.  For more information about IRA gifts to charity, contact the Office of Estate and Planned Giving.

It is often helpful to contact the NCCF Office of Estate and Planned Giving as you are considering planning changes in the beneficiary designation of your retirement plan assets.  Our staff may be able to provide counsel for you and those advising you with your .  For more information or assistance, please contact us at office@nccf4christ.org or 503-892-6264.

[ Back to top of page ]

Example – naming NCCF as beneficiary of retirement account

Funds that held in retirement accounts – IRA, 401(k), 403(b), and similar accounts – are often subject to estate tax and income tax.  These funds are classified as Income in Respect of a Decedent (IRD).  If the decedent had received the property before death, it would have been taxable income to the decedent.

The assets in these retirement accounts are treated differently than other assets.  They are potentially subject to both estate and income tax.  Consider Tom Jones who would like to treat his two grandchildren, David and Sharon, equally.  Upon his death, he leaves $100,000 of stock that he purchased for $60,000 to David and he leaves $100,000 in his IRA account to Sharon.

Both assets could be subject to estate tax if his estate exceeds the amount protected by the “unified credit.”   However, when  David receives his $100,000 of stock he will not have to pay any income.  In fact, he gets a “stepped” basis in the stock, so that if he sells the stock for more than $100,000 he will pay no income tax.

Sharon, on the other hand, receives the $100,000 from the retirement plan.  The entire amount will be subject to income tax because retirement plan distributions are IRD. 

It is best to make a charitable bequest using retirement funds by transferring the taxable investments (IRD funds) to a tax-exempt charity (NCCF) and to transfer the non-taxable assets to the heirs.  Since Northwest Christian Community Foundation is a charitable, tax-exempt entity, the foundation will be able to keep the entire bequest without paying any income taxes.

Beneficiary Designation for NCCF – language for beneficiary designation.

"I designate Northwest Christian Community Foundation, a 501(c)(3) public benefit non-profit corporation authorized to transact business in the State of Oregon, as beneficiary.  (as beneficiary for __  % of the assets of the XYZ retirement account. These funds  may be combined with the foundation’s other funds for purposes of investment and reinvestment and shall be used by Northwest Christian Community Foundation in support of designated program or advised fund. 

[ Back to top of page ]

Example – testamentary planned gift for family member or other beneficiary

By designating a planned gift agreement as the beneficiary of IRD funds, the amount subject to estate tax is reduced considerably and the heirs are taxed on the income only as it is received.  Because of the design flexibility of planned gifts, there are a number of options that may fulfill your planning goals. 

A testamentary gift annuity or unitrust may be good options for you and your family.  How can this be done?

1. In the beneficiary designation of your retirement fund specify that those funds are to be paid directly to the charitable remainder trust named in your will or to NCCF for a gift annuity..
2. In your will designate that those named retirement funds are to be paid directly into the charitable remainder trust or to NCCF for a gift annuity at the same rate as beneficiaries of similar ages would obtain from the foundation.
3. A testamentary charitable remainder trust could be created in your will that would not be funded until your death. 
4. For specific language for a testamentary gift plan to benefit your heirs utilizing retirement fund assets, contact the NCCF office.  503-892-6264.   

[ Back to top of page ]