Getting Started

Do you have money saved in an employee retirement plan, IRA or tax-sheltered annuity? Each of these retirement plan assets contains income that has yet to be taxed. Your beneficiaries will owe the income tax at your death, totaling up to 35 percent, which may be reason enough to consider giving your loved ones less heavily taxed assets and leaving your retirement plan assets to charity instead.

Want to get the most value from your nest egg, protect your heirs from heavy taxes and make your mark at our organization? Consider leaving a portion of your retirement plan assets to us.

How It Works

If you die with retirement plan assets in your estate, those assets are subject to income taxes. This can reduce the amount that normally would be passed to heirs by up to 35 percent. In contrast, as a nonprofit organization, we are tax-exempt and eligible to receive the full amount and bypass any federal taxes. Income taxes can be avoided or reduced through a carefully planned charitable gift. Consider these gift options:

• Designate the El Dorado Community Foundation as the primary beneficiary for a percentage (1 to 100 percent) of your retirement plan assets.
• Designate a specific amount to be paid to us before the remainder is divided among family beneficiaries.
• Make us the contingent beneficiary to receive the balance only if your loved one, as primary beneficiary, doesn't survive you.

Did you know?

If your children are the beneficiaries of your IRAs and other retirement plan assets, federal income taxes may erode up to 35 percent of the amount they receive.

To implement your wishes, simply advise your plan administrator of your decision and sign whatever forms are required.

How You Benefit

Leaving retirement plan assets to the El Dorado Community Foundation shields your heirs from taxes on the retirement assets and frees you to give them other assets that are not as heavily taxed.

For Example

Betty plans to leave $250,000 to her niece, Karen, and $250,000 to the El Dorado Community Foundation. Among her assets, Betty owns a $250,000 IRA. If she leaves the IRA to Karen, it will be subject to income taxes at Karen's marginal income tax rate (35 percent). To avoid her niece having to pay these taxes, Betty names us the beneficiary of her IRA and leaves less tax-burdened assets to Karen. Because our organization is tax-exempt, income taxes are eliminated.

A Second Gift Option

You can also consider creating a charitable remainder trust for heavily taxed retirement plan assets. Such a trust could be set up to receive the proceeds of your retirement plan at your death. The trust would pay income for life to a family member of your choosing, after which the remaining assets pass to us.