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Gifts of retirement plans and IRAs
For more information or to make a donation call the Mercy Hospital Foundation at
Friends and supporters of Mercy and Unity Hospitals are encouraged to name the Foundation as beneficiary of their retirement plans and IRAs. Mercy & Unity Hospitals Foundation may be made a beneficiary of the plan. Using the standard beneficiary designation form that includes the participants name and social security number, the participant should direct that the primary beneficiary be Mercy & Unity Hospitals Foundation. For example, the person could include a statement as follows:
At my death the balance in full shall be distributed in a lump sum to the Mercy & Unity Hospitals Foundation, Fridley, Minnesota.
This distribution will avoid both estate and income taxes. There is one special notation - if an IRA is distributed to the estate and then the estate transfers a specific amount to the Foundation, there will be taxable gain to the estate. The solution is either to distribute directly from the IRA to the Foundation or to transfer a fractional portion of the IRA or pension plan to the Foundation from the estate.
Care must be given to ensure that upon passing, your estate is distributed in the manner desired by you and your heirs. We encourage all of our donors to discuss these matters with their qualified estate planner.
Another alternative is to transfer the plan assets or substantial IRA to a testamentary charitable remainder trust (CRT). This CRT can then make distribution of income to children or grandchildren for a term of years, with remainder to the Foundation.
There would be a partial estate tax deduction based on the payout percentage and the selected term of years with the trust qualifying as a CRT. The total amount of the IRA distributed to the trust can be reinvested with the earnings paid to the children or grandchildren for the selected term. At the end of the term of years, the trust principal, comprised of the untaxed ordinary income originally contributed to the IRA plus untaxed growth, passes with no income taxation to Mercy, Unity or the Foundation.