Retirement Plan Assets or Life Insurance
Retirement Plan Assets
With careful planning you can help avoid unnecessary estate taxes that would otherwise be incurred by your wife or children. By naming NYU School of Law as survivor beneficiary on your qualified retirement plan, the gift becomes completely exempt from estate tax, income tax and generation-skipping transfer tax.
When properly arranged, life insurance offers an attractive way to leverage relatively low premium payments to make a major gift to the University. If you no longer need all the life insurance that you own, you may want to name the University as a beneficiary or contingent beneficiary. Any benefit the University receives from your insurance will be excluded from your taxable estate.
By taking the additional step of naming the University as irrevocable beneficiary and owner of your life insurance policy, you obtain an income tax charitable deduction equivalent to either the policy's cash surrender value or replacement value. If additional premium payments are due, you can deduct those premiums as charitable contributions each year.
(Please consult with your tax professional to see how these alternatives might affect your tax liability.)