Retirement Plan Assets
Do you have money saved in an employee retirement plan, Individuals Retirement Account (IRA), or tax-sheltered annuity? Do you know that the value of your account may be subject to federal and state estate taxes after your lifetime? In addition, each of these plans contains income that has yet to be taxed. When a distribution is made from your retirement plan account, your beneficiaries will owe federal income tax in addition to applicable state income taxes after your lifetime. Consider leaving your loved ones less heavily taxed assets and leaving your retirement plan assets to Northwestern.
As a nonprofit organization, we are tax-exempt and will receive the full amount of what you designate to the University from your plan. You can take advantage of this gift opportunity in several ways:
Name Northwestern a beneficiary of your plan. All this requires is updating your beneficiary designation form through your plan administrator. You can designate Northwestern as the primary beneficiary for a percentage or specific amount. You can also make the University the contingent beneficiary so that Northwestern will receive the balance of your plan only if your primary beneficiary doesn’t survive you.
Fund a testamentary charitable remainder trust. When you fund a charitable remainder trust with your heavily taxed retirement plan assets, the trust will receive the proceeds of your plan upon your death. The trust typically pays income to one or more named beneficiaries for life or for a set term of up to 20 years, after which the remaining assets in the trust would go to support Northwestern. This gift provides excellent tax and income benefits for you while supporting your family and Northwestern.
A donor-advised fund. When retirement plan assets pass to your heirs, they can be subject to federal income and estate taxes. This combined income and estate tax burden can be substantial, reducing the value of the intended gift. Instead, you can designate your donor-advised fund as the beneficiary of all or a portion of your retirement plan assets. Your fund receives the full amount of the gift and bypasses any federal taxes.
See How a Gift of Retirement Plan Assets Works
- Contact Northwestern Gift Planning at 800-826-6709 or firstname.lastname@example.org for additional information.
- Seek the advice of your financial or legal advisor.
- If you include Northwestern in your plans, please use Northwestern's legal name and federal tax ID number.
Legal Name: Northwestern University
Address: 633 Clark Street, Evanston, Illinois 60208
Federal Tax ID Number: 36-2167817
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.
This is not legal advice. Any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequences of his or her gift.
Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association.