Retirement plans and IRAs can be the most highly taxed assets in an estate. With income tax on distributions and possible estate taxes factored in, the total tax bill for heirs can exceed 50% of the assets.
However, because Princeton is a tax-exempt institution, ownership of retirement assets can pass to the University without taxation. Alumni and friends who would like to make a tax-efficient bequest should consider naming Princeton as a beneficiary of an IRA, Keogh, tax-sheltered annuity, or qualified pension or profit-sharing plan -- it’s the most tax-efficient way to create a legacy.
Examples of Retirement Plan Gifts
Capping a Lifetime of Giving
George Marshall Hornblower ’39, a partner at the law firm Wilmer, Cutler & Pickering, held a 401(k) plan with the firm. He designated Princeton and one other institution as beneficiaries of the plan. If he had not taken care to designate charities as the beneficiaries, it is possible that over $400,000 in his 401(k) would have been subject to taxation. Instead two organizations are able to put this money to good use. He was able to cap his lifetime of giving to Princeton -- 64 consecutive years to Annual Giving -- with a wonderful, unrestricted gift.
A Professor's Thoughtful Gift
Kathryn (“Kitty”) Conway Preyer S45 spent nearly her entire career as a professor of history at Wellesley College, where she taught American history courses and seminars. She made generous gifts to Wellesley, and chose to honor her husband, Robert O. Preyer ’45, by giving Princeton the tiger’s share of her TIAA-CREF account. The bequest is added to the fellowship in the Department of English that was established in her husband’s name.
We encourage you to contact the Office of Gift Planning at 609.258.6318 or email@example.com to discuss your gift of retirement assets to Princeton.