Gifts through Accounts

Designating the University of Maine Foundation as a beneficiary of a retirement, investment or bank account, or life insurance policy is an easy way to make a planned gift.

Beneficiary Designations:

One of the easiest ways to include the University of Maine in your legacy is through a beneficiary designation.  You can help support the future of the University of Maine by designating the University of Maine Foundation as your primary or contingent beneficiary to receive any portion of assets such as: a bank account, investment fund, a donor-advised fund or retirement account; life insurance policies; and other financial instruments.

Some donors prefer to make gifts to the University of Maine Foundation that do not take effect until their deaths because they are concerned that they might need the assets to pay for unforeseen expenses later in life.  Beneficiary designations are flexible and can be changed at any time if you need to make adjustments to meet changed circumstances.

Even though the Foundation staff always recommends that donors consult with their advisers before making a planned gift, donors do not need an attorney to complete a designated beneficiary form or to change it at some later time. This simplicity and lack of cost appeals to many donors.

To include a gift of support for the University of Maine through a beneficiary designation, please include the following information:

UNIVERSITY OF MAINE FOUNDATION, Two Alumni Place, Orono, ME 04469-5792 to be added to [or to create] the _____ Fund.

The University of Maine Foundation’s tax identification number is 01-6011501.

If you are asked to identify a contact at the University of Maine Foundation, please list Sarah McPartland-Good, Esq., General Counsel, University of Maine Foundation, Two Alumni Place, Orono, ME 04469-5792, (207) 581-5100.

Retirement Accounts

Millions of Americans take advantage of retirement opportunities such as IRAs, 401(K)s or other qualified plans. These plans allow people to delay payment of taxes on money they save for future use. The retirement funds then grow income tax free until the time of withdrawal by the owner of the funds. Charitable giving with retirement assets as part of your estate planning can provide significant tax advantages.

Retirement accounts can be subject to a combination of federal and state income and estate taxes that can seriously erode their value. Retirement savings are subject to federal and state income tax as received, either by the retiree or the retiree’s heirs at the heirs’ ordinary income tax rate. Because retirement assets are included as part of the taxable estate at death, the assets in qualified retirement plans can also be subject to federal and state estate taxes.

While retirement assets are often overlooked as potential charitable gifts, they can be a convenient, tax-favored giving option for charitably minded individuals. Careful planning for the disposition of retirement plan assets can help to avoid undesirable tax costs. Properly structured gifts of retirement account balances can improve the donor’s overall tax consequences, increase the amounts passing to heirs and escape income and estate taxes.

Example: Ann, a widow, has recently died. She has one surviving child. Her estate assets include her home, valued at $300,000 and an individual retirement account (IRA) of $300,000. Ann’s will divides her estate equally between her child and the University of Maine Foundation, specifying that her child will receive the IRA account, and that her house will go to the University of Maine Foundation for the benefit of the University of Maine.

Result: The house will pass to the Foundation with no income tax consequences. However, the amounts paid from the IRA will be taxed at the child’s income tax bracket when received. If the child is in the 32% tax bracket, the amount remaining after income taxes of $96,000 will be $204,000. The child’s inheritance has been depleted by nearly 1/3.

Better Result: Ann should leave her house to her child, who can sell it immediately, with no federal income tax or capital gains taxes if it is sold at Ann’s date of death value. The child will receive approximately $300,000. The Foundation should be designated as beneficiary of the IRA account worth $300,000. Because the Foundation is a tax-exempt organization, it will not be subject to income taxes on the IRA distributions. This simple rearrangement saves $96,000 in taxes and increases the amount passing to Ann’s heir.

Life Insurance

Life insurance policies can also be used to make a gift to support the University of Maine.

Changing a life insurance beneficiary form to include the University of Maine Foundation can also be very simple. Indeed, it can often be done online. Learn more about how to name the University of Maine Foundation as a beneficiary to your life insurance policy and other ways to use life insurance to make a gift to support the University of Maine.

Donor Advised Funds

If you have a donor-advised fund, you may wish to put in place a plan for how that fund should be used after your lifetime. One underutilized aspect of a donor-advised fund is the opportunity to designate a succession plan to direct how your fund will be used after your death or inability to advise. Typically, if you have not identified a succession plan, your donor-advised fund will become part of the charity that holds your fund (for example, Schwab Charitable, Fidelity Charitable, etc.) and grants will be made in accordance with its charitable goals.

One possible succession plan is to recommend one or more charitable beneficiaries to receive grants from your fund once you are no longer able to make recommendations. If you have not already named a charitable beneficiary, we invite you to consider naming the University of Maine Foundation in this capacity. You can specify a particular fund held here a the Foundation as well.

To add a charitable beneficiary, simply contact the public charity that holds your charitable account to request this change. They may require our tax identification number which is 01-6011501.

Other Assets/Accounts

• Bank Accounts – You can instruct your bank to pay the University of Maine Foundation all or a portion of what remains in a checking or savings account upon your death. Your bank can provide you with the appropriate form – often known as a payable-on-death form.
•Investment Accounts – You can instruct your investment company to transfer, at the time of your passing, some or all investments held in your account(s) to the University of Maine Foundation. Your broker or agent can let you know the process for putting transfer-on-death instructions on your investment account(s).
• Commercial Annuity Contracts – Commercial annuities sometimes have a remaining value at the end of the annuitant’s lifetime. You can designate the University of Maine Foundation to receive all or part of this amount by identifying it as a beneficiary on the appropriate form from the annuity/insurance company.