Retirement Plan Assets

Tax Relief For Loved Ones

Retirement plan assets are a great way to support the University of Maryland because they not only help support future Terps, but they also can provide tax relief for your loved ones.

Money in an employee retirement plan, IRA or tax-sheltered annuity has yet to be taxed. When a distribution is made from your retirement plan account to a beneficiary, that person will owe federal income tax.

Consider leaving your loved ones less heavily taxed assets and leaving your retirement plan assets to Maryland to support our future. As a nonprofit institution, we are tax-exempt and will receive the full amount of what you designate to us from your plan. You can take advantage of this gift opportunity in the following ways:

Name us a beneficiary of your plan. This requires you to update your beneficiary designation form through your plan administrator. Here you can designate Maryland as the primary beneficiary for a percentage or specific amount. You can also make us the contingent beneficiary so that we will receive the balance of your plan only if your primary beneficiary doesn't survive you.

With the Qualified Charitable Distribution, if you are 70½ years old or older, you can take advantage of a simple way to support Maryland and receive tax benefits in return. You can give up to $100,000 from your IRA directly to a qualified institution such as Maryland without having to pay income taxes on the money. This gift can also qualify as your required minimum distribution (RMD) if you are age 72 and above.

Fund a testamentary charitable remainder trust. When you fund a charitable remainder trust with your heavily taxed retirement plan assets, the trust will receive the proceeds of your plan. The trust typically pays income to one or more named beneficiaries for life or for a set period of years, after which the remaining assets in the trust would go to support Maryland. This gift provides excellent tax and income benefits for you while supporting your family and our mission.

In addition, non-spouse beneficiaries inheriting an IRA must withdraw the entire amount within 10 years (previously the funds could be stretched over the beneficiary’s lifetime). Contact the Office of Gift Planning to learn how a charitable remainder trust can resolve this issue.

A donor advised fund. When retirement plan assets pass to your heirs, distributions are taxed as ordinary income. This income tax burden can be substantial, greatly reducing the value of the intended gift. Instead, you can designate your donor advised fund as the beneficiary of all or a portion of your retirement plan assets. Your fund receives the full amount of the gift and bypasses any federal taxes.

See How It Works

Next Steps

  1. Contact the Office of Gift Planning at giftplanning@umd.edu or 866.646.4UMD for additional information.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Maryland in your plans, please use our legal name and federal tax ID.

Legal name: University of Maryland College Park Foundation
Address: 4603 Calvert Road, College Park, MD 20740
Federal tax ID number: 52-2197313

Additional Resources

Plan a Charitable Gift Today

Take advantage of this tax-smart gift opportunity. Download our FREE guide Make the Most of Your Retirement Plan Assets: Avoid Taxation and Support Our Work.

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