Naming the individuals and charities that will receive your assets once you are gone can be a simple process. Most assets can pass to your intended beneficiaries by the terms of your will. Other assets, such as retirement plans, life insurance and insurance annuities, however, are not controlled by the terms of your will. These assets instead require separate beneficiary forms.
IRA and Retirement Plan Beneficiaries
Most retirement plans, including 401(k)s and IRAs, are income tax–deferred, meaning that income tax is not paid until the funds are distributed to you in life, or upon your death. Because they are subject to income taxes to your beneficiaries, retirement assets make ideal gifts to tax-exempt charitable organizations such as Marin Theatre Company. Otherwise, the income taxes on retirement assets you leave to your loved ones can be as high as 35 percent. This means that an IRA worth $100,000 will be worth only $65,000 by the time it reaches them. On the other hand, the naming of a charity as the beneficiary of retirement assets upon death generates no income taxes. The charity is tax-exempt and eligible to receive the full amount and bypass any income taxes. This means that in the above example, Marin Theatre Company would receive the full $100,000 benefit.
To name or change a beneficiary, simply contact the administrator of the IRA or retirement plan for a change of beneficiary form. If you would like to name Marin Theatre Company as beneficiary, simply decide what percentage of the plan's value (0–100 percent) you would like MTC to receive and name us, along with the stated percentage, on the beneficiary form. Then return the form to the administrator of the plan.
Life Insurance Policy Beneficiaries
Life insurance is a popular method of providing much-needed funds to a beneficiary at your death. It is also a low-cost way to provide a large benefit for someone in need. Life insurance proceeds are almost always income tax–free to the beneficiary. The beneficiary designation in your life insurance policy determines where the proceeds will be distributed. The death proceeds, therefore, are not typically transferred through your will. Life insurance can be distributed to a charitable organization such as Marin Theatre Company if we are named as a beneficiary of the policy.
Contact your insurance company for its change of beneficiary form for the life insurance policy. If you would like to name Marin Theatre Company as a beneficiary, simply decide what percentage of the policy's value (0–100 percent) you would like us to receive and name MTC, along with the stated percentage, on the beneficiary form. Then return the form to your insurance company.
Insurance Annuity Beneficiaries
Insurance annuities, unlike life insurance, carry an income tax burden. Your named beneficiary is responsible for paying the income tax due on the growth of the annuity while you owned it. The tax burden makes these assets a popular choice to leave to a charitable organization like Marin Theatre Company because we, as the recipient, can eliminate the tax bill.
Contact your insurance company for its change of beneficiary form for the insurance annuity. If you would like to Marin Theatre Company as a beneficiary, simply decide what percentage of the annuity's value (0–100 percent) you would like MTC to receive and name us, along with the stated percentage, on the beneficiary form. Then return the form to your insurance company.