Retirement Accounts & Beneficiary Designations
Saving and setting aside a sum of money for your retirement years is not just good advice, but one that is wise. And one way you can do that is by allowing your money to grow income tax-free in qualified retirement plans such as IRAs (Individual Retirement Accounts). Although IRAs receive tax-free growth, IRAs are taxed when money is withdrawn.
How the Tax is Collected:
How Is My IRA Taxed When I Am Living?
While you are living, if you take money from your IRA, the amount you withdraw will be taxed to you as ordinary income. However, if you take money from your IRA before you are 59½ years old, you will not only pay tax but also a 10 percent penalty. If you do not begin taking money from your IRA by the time you are 70½ years old, you will need to pay a 50 percent penalty.
What Happens When I Pass Away?
After you pass away, your IRA will be transferred to your beneficiary. If the beneficiary is your spouse, you can transfer the IRA to your spouse with no tax consequences.
However, if the beneficiary is not your spouse, the beneficiary must pay income tax on the entire IRA. This type of tax is known as “Income in Respect of a Decedent.” IRAs, 401(k)s, deferred compensation plans, and other qualified plans are subject to this tax. However, depending on the size of your retirement plan, this tax (along with estate taxes) could reduce the amount passed to your beneficiary by up to 75 percent.
Charitable Gifts of IRAs
If you plan on making gifts to Joseph Prince Ministries in your estate plan, consider making them from your IRA instead of other assets. Your beneficiaries must pay tax on the IRA, but a “tax-exempt” charitable organization like ours does not. That is why gifts of IRAs to the ministry at death can be beneficial. By making this ministry a beneficiary of the IRA, you save your heirs tax dollars and support the gospel of grace that changes lives, one at a time.
Naming Joseph Prince Ministries as a primary or contingent beneficiary on your retirement assets provides income and estate tax savings. As with other assets that are given through beneficiary designation, you maintain the use of the retirement assets while living.
Beloved, thank you so much for considering this ministry as a beneficiary! Should you decide to proceed, do contact your retirement plan administrator. We would greatly appreciate it if you could also notify us once your form has been submitted.
To ensure the successful listing of Joseph Prince Ministries as a beneficiary, do include the following details below.
Joseph Prince Ministries, Inc.
PO Box 2115, Fort Mill, SC 29716
Qualified Charitable Distributions (IRA Rollover to Charity)
There is an easier and more tax-efficient way to give, and it is from eligible IRA accounts. A Qualified Charitable Distribution (QCD) can be made from a traditional or other eligible IRA.
To be eligible to receive tax benefits, the following conditions must be met:
- Donor must be 70½ or older at the time of the gift
- Funds must be withdrawn from a traditional or other eligible IRA account
- Funds must be directly transferred from the IRA to the ministry with no intervening ownership by the IRA owner
- Donor must not receive any benefits of value in return for the gift
- Gifts must not exceed $100,000 in total qualified charitable distributions per tax year, per individual
- Gift must be properly reported to the IRS on the donors’ tax return
Once Joseph Prince Ministries receives your gift, you will receive a non-deductible gift acknowledgement from Joseph Prince Ministries.
To learn more about how to make this type of gift, contact our legacy planning team via this contact form, and one of our team members will be in touch with you.
Naming Joseph Prince Ministries as a beneficiary on any of your financial accounts is a straightforward way to make a future planned gift.
POD—this is a designation used, for example, on a bank account so that it is Payable on Death (POD) to a beneficiary i.e. a nonprofit organization. To designate this ministry as a beneficiary, a donor would fill out this paperwork at their bank or financial institution identifying the percentage that goes to a charitable beneficiary and the percentage that goes to non-charitable beneficiaries: family, heirs, etc.
TOD—this is a designation used, for example, on securities, automobiles, and real estate so that it is Transferred on Death (TOD) to a beneficiary i.e. a nonprofit organization. To designate this ministry as a beneficiary, a donor would contact their stockbroker or investment company, their state’s motor vehicle department, or their attorney to prepare a deed.
“Payable on Death” or “Transfer on Death” accounts remain in your ownership and control while you are living. You may make additions or withdrawals from the account and may cancel or change the named beneficiary. At your death, remaining assets would simply be transferred to Joseph Prince Ministries.
Beneficiary Designations—including Joseph Prince Ministries as a beneficiary on retirement accounts (401(k), 403(b), pension plans, etc.), life insurance policies, annuity contracts, and beneficial deeds are simple ways to give to this ministry. You may either designate a percentage or a specific dollar amount to a nonprofit. To designate, a donor would contact their retirement plan administrator or obtain a change of beneficiary form from their insurance company and complete a new beneficiary designation form with the changes.
Many people purchase life insurance policies to protect themselves, for financial security, and to pay off their mortgage or their child’s education. But there may come a time when you feel you no longer need financial protection in these areas, and you wish to gift this policy instead.
Gifting life insurance is one of the simplest ways you can make a contribution to Joseph Prince Ministries. It provides an easy way to support Joseph Prince Ministries and provides tax benefits that you can enjoy during your lifetime.
Here are several ways that you can support Joseph Prince Ministries through a gift of life insurance.
- You can name Joseph Prince Ministries as the owner and beneficiary of your policy,
- You can name Joseph Prince Ministries as the sole beneficiary of the policy,
- You can name Joseph Prince Ministries as a co-beneficiary on the policy,
- You can name Joseph Prince Ministries as a secondary beneficiary on the policy, or
- You may assign annual dividends to Joseph Prince Ministries as a gift.
Specific tax benefits will depend on the method of giving you choose.