Retirement Plan – Give Us Your Most Tax-burdened Asset

What is a gift of retirement plan?

Qualified Retirement Plans may be the most tax-burdened assets you can own. If you die before you have taken all of your distributions from your IRA, 401(k), Keogh, SEP or other qualified plan, the balance remaining in your plan can be subject to multiple taxes that can claim up to 75% of its value for those in higher estate tax brackets.

Retirement plan assets may be subject to BOTH income and estate tax when you die. You can roll over your retirement plan at your death to your surviving spouse without incurring any taxes. When your surviving spouse dies, however, any remaining plan assets can become subject to multiple levels of taxation, including Federal income tax, Federal estate tax (partially offset by an income tax deduction) and generation-skipping transfer tax (GST) if the distribution is made to a skip person, such as a grandchild.

This can create a scenario where as little as 25 cents on the dollar remains for your heirs. Why give your hard-earned retirement assets to the government when you can give them to Oxford University instead?

Here's how:

  1. If you have no spouse, or your spouse is already adequately provided for, just fill out a “Change of Beneficiary Form” naming Oxford University as the primary beneficiary of your plan. Give other assets to your heirs. Your plan assets will go tax-free to Oxford University and your heirs will receive their share of your estate without the burden of extra taxes. If your spouse is living, state law may require that he or she sign a "Spousal Waiver of Benefits."
  2. Set up a Charitable Remainder Trust in your will into which you transfer any residual in your retirement plan at your death, naming your surviving spouse or children as income beneficiaries for life or a term of years and Oxford University as the charitable remainder beneficiary. This approach will avoid all income tax liability and generate a partial estate tax deduction.

WARNING: Consult your legal and tax advisors before making any material decisions based on this information.

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E-mail us, complete the Personal Illustration form, or call us at 212 377 4900 so that we can assist you.