Giving from your retirement plan as part of your estate plan
The best method of giving a retirement plan gift is to name Stanford as a beneficiary on your plan’s beneficiary designation form. The tax advantage stems from the fact that most retirement plans (other than Roth IRAs) are subject to income taxes—and possibly estate taxes—if left to an individual beneficiary; however, a charity that is named as the beneficiary does not pay income or estate taxes on the distribution. Thus, the full value of what is distributed can be used by Stanford, supporting the purpose you designate.
To name Stanford as a beneficiary, you can obtain a beneficiary designation form from your IRA plan administrator. That form usually asks for the name of the beneficiary (Stanford University), its address (326 Galvez Street, Stanford, CA), and a tax identification number (94-1156365). This will provide an unrestricted gift to Stanford. If you would like to direct your future gift to a specific purpose, contact the Office of Planned Giving for appropriate documentation.
IRA qualified charitable distribution (QCD)
You may also be able to make a gift to charity with a “qualified charitable distribution” or “IRA charitable rollover” from your Individual Retirement Account (IRA) and take advantage of tax savings. Under Section 408(d) of the Internal Revenue Code, Americans over the age of 70 ½ may distribute an amount, not to exceed $100,000 in a calendar year, from an IRA to Stanford or other public charities, tax-free. Effective January 1, 2020, under the Setting Every Community Up for Retirement Enhancement (SECURE) Act, the amount allowable as a qualified charitable distribution to Stanford or other charities will be reduced dollar-for-dollar by the total amount of deductible IRA contributions on or after an individual reaches 70 ½.
If an IRA owner directs the IRA plan administrator to distribute an amount, not to exceed $100,000 in a calendar year, to a public charity, the distribution counts toward the owner’s required minimum distribution (RMD), but is not included in his or her income for income tax purposes. Although the IRA owner is not entitled to a charitable deduction for the distribution, the distribution benefits charity and does not count as income to the owner.
How a qualified charitable distribution works:
You must be 70 ½ or older at the time of distribution.
You may distribute an amount, not to exceed $100,000 in a calendar year, to one or more public charities, so long as it is completed by December 31 of the year in which you intend to make the charitable distribution. The amount of the distribution will be reduced by any deductible contributions made to an IRA on or after you reach 70 ½.
Your IRA administrator must make the distribution directly to the charity, or you may write a check payable to the charity from your IRA checkbook (special rules apply when a check is written from an IRA checkbook, please contact the Stanford Office of Planned Giving for more information). A sample letter of instruction to your IRA administrator requesting a distribution to Stanford is provided below.
If you make a gift to Stanford from your IRA, please include written instructions on how you would like to designate your gift. You can also call (866) 543-0243 email firstname.lastname@example.org with your gift designation.
Certain restrictions and requirements* must be followed when making this type of gift. If you have questions, please call the Office of Planned Giving at Stanford at (650) 725-4358 or (800) 227-8977, ext. 54358, or email email@example.com. Before proceeding, you should also consult with your tax advisor to discuss your particular situation including any impact of your state’s tax laws.
* For example, the following transfers will not qualify: distributions to private foundations, to donor advised funds, and for any purpose that entitles you to receive a benefit, such as preferred seating at athletic events or tickets to a dinner.
Gifts may be sent to:
P.O. Box 20466
Stanford, CA 94309-0466
Stanford University’s federal tax identification number is 94-1156365.