The simplest, and commonly overlooked, way to plan a gift is to make Bryn Mawr College a beneficiary of your retirement plan. All you need to do is to file a revised beneficiary designation form with your retirement plan administrator to designate Bryn Mawr as a beneficiary of your plan and name the percentage of your remaining assets that you want us to receive. Here is "why" and "how" using a beneficiary designation may work for you, your heirs, and Bryn Mawr College.
GIVING THROUGH A BENEFICIARY DESIGNATION.
Beneficiary Designations. Easy for you. Favorable for your heirs.
Your will or living trust - only part of the picture
The distribution of assets passing through your probate estate is determined by your will. If you have a living trust, it only distributes assets owned by the trust. You likely own many assets whose distribution is not controlled by your will or living trust. These assets will pass to your heirs or others you have named as beneficiaries in documents other than your will or living trust. You may have more assets that will pass through beneficiary designations than will pass under your will or living trust.
Your beneficiary designation controls who gets these assets
- Retirement accounts
- Life Insurance Policy
- Bank accounts such as Certificates of Deposit and Savings Accounts
- Investment Accounts at brokerage companies
- Commercial Annuity Contracts
The taxes can reduce what your heirs receive
In most cases, you have never paid income taxes on assets you contributed to retirement accounts such as IRAs, 401(k)s, and 403(b)s. If you name your heirs as beneficiaries of these accounts, the IRS will require that they pay income taxes when they withdraw the assets, which for most non-spouse designated beneficiaries must take place within 10 years, potentially pushing those beneficiaries into higher tax brackets. If your estate is subject to estate tax, assets controlled by beneficiary designation could subject your estate to even more taxes and further deplete these accounts for heirs. Bryn Mawr is tax-exempt. Therefore, if you name Bryn Mawr as the beneficiary you can use the full value of the accounts to advance our mission. Leaving other assets to your heirs will allow them to keep more of your assets.
Your next steps
You should consult with your professional advisors as to how naming Bryn Mawr as a beneficiary of some or all of your accounts will impact your overall estate plan. You will need to obtain the beneficiary designation forms from account administrators and return the completed forms to the administrators. Some financial institutions will allow you to designate beneficiaries through their website.