San Jose State University

Beneficiary Designations

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Make a Big Difference With Just a Little Effort 1 ] Retirement Plans and IRAs If you want to make a difference at San Jose State after your lifetime, consider a tax-wise gift from your retirement plan or IRA. Here's why. A retirement plan or IRA is typically the largest source of assets that generate taxable income when paid to a beneficiary. More than half of your retirement plan assets could be subject to income and estate taxes. Therefore, if you are considering a gift to us after your lifetime, it is usually better to leave taxable assets to us and give nontaxable assets (such as stocks and real estate) to your loved ones. To complete your gift, simply contact your retirement plan or IRA administrator and complete a beneficiary designation form naming us as beneficiary and the percentage you'd like us to receive (1–100). Then mail it back to the plan administrator and keep a copy for your records. Beneficiary forms are filled out on your terms and can be changed at any time. EXAMPLE Dan would like to leave SJSU his $100,000 IRA after his death. If he names us as the beneficiary for 100 percent of his IRA, we would receive the entire $100,000 to help fulfill our mission. By comparison, if Dan leaves the IRA to his sister, she will owe a sizable amount of the IRA to income taxes. 2 ] Life Insurance Policies Maybe you once needed life insurance for your loved ones, but now your family's requirements have changed. Why not use the insurance policy to help advance our mission? Not only will you make a substantial gift at a relatively low cost, but it is revocable at any time should you need to change your plans. You can designate SJSU as the beneficiary for a percentage of your life insurance policy's death benefit. You choose whatever percent you desire. To complete your future gift, Although many people think of a will as the easiest way to transfer assets after their lifetime, it doesn't cover everything. In fact, retirement plans, IRAs, life insurance and commercial annuities are not controlled by the terms of your will, but instead use separate beneficiary forms to determine who receives them. These beneficiary designations trump your will when it comes to passing along these assets at your death, making them effective and easy ways to leave a legacy. CHOSEN BENEFICIARY SISTER SJSU Value of Dan's IRA at his death $100,000 $100,000 Federal income taxes (assumes 28 percent marginal income tax bracket) $28,000 $0 Net amount to beneficiary $72,000 $100,000 $100,000 IRA Left to Dan's Sister vs. San Jose State Compare the Tax Consequences

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