Giving Now & Beyond
Bequests of qualified retirement plans can be extremely tax efficient. This is because St. Louis Community Foundation (STLCF) is tax-exempt which means the funds flowing directly to a client’s fund at STLCF from a retirement plan after the client’s death will not be reduced by income tax. This also means the assets will not be subject to estate tax.
Don’t overlook life insurance, either. Not only is your client able to designate a fund at STLCF as the beneficiary of a life insurance policy, but your client also may elect to transfer actual ownership of certain types of policies. For example, when your client makes an irrevocable assignment of a whole life policy to the client’s fund at STLCF, a tax-deductible gift of the cash value of the policy occurs at the time of the transfer. A gift like this can ease a client’s income tax burden, especially if STLCF continues to own the policy and the client makes annual tax-deductible gifts to cover the premiums.
St. Louis Community Foundation makes it easy for you to draft bequest terms in legal documents, including beneficiary designations of retirement plans and life insurance policies. Please contact Katie Knapp for the exact language that will ensure alignment with your client’s intentions.
Keep in mind that even after a client has executed estate planning documents or beneficiary designations, in most cases the client can update the terms of their fund at STLCF.
Clients love the ease and flexibility and certainly will appreciate your bringing this technique to their attention.
Interested in learning more? Contact Josina Greene, Giving Strategist, at firstname.lastname@example.org.