Retirement Assets

One of the simplest and most "tax wise" ways to make a gift to Stephens College is through your IRA, 401(k), 401(b) or other qualified retirement plan. You can name Stephens as the direct or contingent beneficiary of all or a percentage of your plan. A simple fund agreement between you and the College will ensure that Stephens uses the money according to your wishes.

There are two major benefits to using retirement assets to fund a charitable gift. First, you will avoid federal estate taxes on the value of the assets that pass to Stephens. In addition, heirs are subject to income taxes when they receive distributions from retirement plans. Designating Stephens as beneficiary bypasses these taxes.

Example:

Marie has an 401(k). She does not want to leave the funds to her family members because she knows they will have to pay income tax on any distributions from the 401(k). Marie decides to name Stephens as the beneficiary of her 401(k). Upon her death, the funds in the account will transfer to Stephens. She will avoid paying estate taxes on the value of the account and make a generous gift to Stephens in the process.