Planned Giving - Retirement Assets

Giving retirement assets later:
Avoid double taxation on retirement plan assets

While the primary purpose of retirement plan assets is to provide a source of income during retirement, in many cases substantial balances remain after death. When left to family members (other than a spouse) or friends, these gifts can be subject to considerable taxes, including estate and income taxes.

Why? Because these assets have been allowed to accumulate free of income taxation, the owner is required to pay income taxes on the withdrawals made during retirement. If, upon death, the owner leaves these remaining assets to individuals other than a spouse, the assets are considered part of the owner’s estate – and thereby possibly subject to estate taxes – and the beneficiaries must pay income taxes on the withdrawals as the account owner did during life. Retirement plans are consequently referred to as income in respect of the decedent (or “IRD”) assets.

You can avoid paying estate tax, if applicable, and income tax on retirement plan assets left to nonprofit organizations like Marquette. That is why retirement plan assets are considered tax-efficient gifts to charity and why other non-IRD assets are better suited as gifts to your heirs.

What steps do I need to take to donate retirement assets?

1. Contact your retirement fund/account manager to ask for a beneficiary designation form.

2. Complete the beneficiary designation form as follows and return to your account manager. On the beneficiary designation form itself: Print “Marquette University, Milwaukee, WI” on the line provided to name beneficiaries. Indicate the desired percentage to go to Marquette in the appropriate space provided on the form. Sign and date the form as necessary. Example:

Beneficiary Percentage

Marquette University


3. Contact Marquette's Office of Planned Giving to document the intended purpose for your gift (i.e.: general purposes, scholarship, a particular college or program).

Giving retirement assets now

If you are 70½ or older, you can roll over up to $100,000 annually from your IRA to Marquette University.

  • Your gift will count against your required minimum distribution for the year.
  • Your taxable income will be reduced, even if you do not itemize deductions.
  • You will not be subject to the 60% of adjusted gross income limitation on charitable gifts.

To make an IRA rollover gift, simply contact your IRA custodian and request that an amount be transferred to Marquette University by wire or check, according to Marquette's instructions.

These gifts do not qualify for a charitable deduction – not being taxed on the withdrawal is usually more tax advantageous than a charitable deduction.

  • Only standard IRAs are eligible; other retirement accounts such as 401(K), 403(b), SEP, and KEOGH plans cannot be used to make an IRA rollover gift, but they can be rolled into an IRA in anticipation of an IRA rollover gift. (Check with your financial advisor.)
  • Donors of IRA rollover gifts cannot receive any personal benefits, such as Marquette Men’s Basketball priority points, in connection with the gift. Similarly, planned gifts such as charitable remainder trusts and gift annuities, which provide the donor with periodic income payments, are not eligible to receive IRA rollover gifts.

Quick tip

What if I choose to name my children as 50% beneficiaries and Marquette as a remaining 50% beneficiary?

  • Children have the ability to stretch out the funds they receive (minimum required distributions) from an IRA.
  • By including a charity, the ability of the children to stretch out distributions for maximum tax deferral can be hindered unless Marquette’s share is paid out by September 30 in the year following the year the owner dies.

The McCostlin Legacy:
Inspiration and Impact

Meeting on campus was part of a Marquette experience that remains present in Adam's and Beth's lives.

"I don't think I'd be the person I am today without a Marquette education." - Adam McCostlin, Bus Ad '06

Dr. Paul Andrews' Legacy:
Opening Doors for Veterans

When asked what provided him the greatest help in his life, Dr. Paul Andrews knew how to answer and how to pay it forward.

"I am getting more in my heart from this gift." - Dr. Paul Andrews, Dent '74