Beneficiary Designations
Jim was a widower who had a great love for Habitat for Humanity. As an individual who had directly benefited from our work, Jim wanted to thank Habitat with a gift from his estate.
Jim told his attorney that he wished to leave a bequest to Habitat as part of his estate plan. Jim's estate included some stocks, real estate and an IRA. Jim's attorney recommended that he give the appreciated stock and real estate to his children and leave his IRA to charity.
Jim: “My attorney told me that if I gave the stock and real estate to my children, these assets would receive a step up in basis at my death. My children could then sell them without paying tax. However, if I gave my children my IRA, the IRA would be subject to estate and income tax. After paying all of these taxes, very little would be left for my family. By giving the IRA to Habitat, I could make a nice gift and avoid any additional tax for my estate and children.”
Jim contacted his IRA custodian to obtain a beneficiary designation form. He filled out the form and designated Habitat as the 100% recipient of his IRA account. Jim's attorney then specified in Jim's will the bequest of his other assets to his children.
Jim called and notified Habitat of his bequest. He was pleased to learn that because Habitat for Humanity was a tax-exempt institution, it would receive the full amount of the IRA value when he passed away, creating a legacy for the future.
You can make a difference at Habitat St. Johns now or for future generations with a tax-wise gift from your retirement plan or IRA.
Why it is “tax-wise”
A retirement plan or IRA is typically the largest source of assets that generate taxable income when paid to a beneficiary. More than one-half of your retirement plan could be subject to income and estate taxes. Therefore, if you are considering a gift to Habitat after your lifetime, it is usually better to leave taxable assets to us and give nontaxable assets to your loved ones.
Qualified Charitable Distribution
A qualified charitable distribution, also known as a charitable IRA rollover, allows donors 70½ or older to make tax-free IRA gifts of up to $100,000 per year directly from their individual retirement accounts. The funds must be transferred directly to the charity; depositing the funds first in your account will result in a taxable event.
Life Insurance Policies
Life circumstances may change, and the needs you once had for permanent life insurance benefits may no longer be the same today. You can name Habitat (as a nonprofit organization) to be the beneficiary of a life insurance policy just as you can name people as beneficiaries. Because you can name more than one beneficiary, you can divide the death benefit among your loved ones and Habitat.
Life Insurance and Retirement Plan Beneficiary Language
You may name Habitat St. Johns as a primary or secondary beneficiary of your IRA or other qualified retirement benefits. Donors should consult with their tax advisor regarding the tax benefits of such gifts.
Naming Habitat St. Johns as the beneficiary of a life insurance policy or qualified retirement plan asset such as a 401(k), 403(b), IRA, Keogh or profit-sharing pension plan will accomplish a charitable goal while realizing significant tax savings. It can be costly to pass such assets on to heirs because of heavy tax consequences. By naming Habitat St. Johns as a beneficiary of a life insurance policy or retirement plan, the donor maintains complete control over the asset while living, but at the donor’s death the asset passes to support Habitat St. Johns free of both estate and income taxes.
Please use the following if you wish to make Habitat St. Johns a beneficiary:
Legal name: Habitat for Humanity of St. Johns County
Address: 7 Hopkins Street, St. Augustine, FL 32084
Tax ID Number: 59-3129794
Secure Your Legacy
The first step is to curate a plan. A plan allows you to determine how your assets, property, and personal belongings are distributed among your beneficiaries. It ensures that your hard-earned wealth goes to the people or causes that matter most to you, including Habitat St. Johns. Simply put, Planned Giving ensures your charitable legacy complements your estate plans and supports your family while creating maximum impact in the community.
Be sure to consult your team of professionals for guidance—estate planning attorneys, accountants, and financial and tax advisors who can walk you through the process and keep you informed, according to the plan you devise.
Finally, discuss your plans with loved ones and financial professionals. It is important that your family feels included and aware of your giving plans. Knowing that your wishes are documented and legally binding provides you with the reassurance that your beneficiaries will be taken care of according to your instructions, providing loved ones with peace of mind during tough times.
If you or your attorney would like Habitat St. Johns to provide you with customized beneficiary language that is specific to your goals and interest, please contact Tom Torretta at [email protected] or 904-826-3252 x2001. Please call or email so we can assist you through every step of the process.
If you believe strongly in the work we are doing and want to be a part of our future success, we encourage you to consider Habitat of Humanity of St. Johns County when you are doing your estate planning.
Thank you for your kindness and for caring about the hardworking individuals and families in our community who will benefit from your generosity!
