University of Minnesota
University of Minnesota Foundation
http://www.give.umn.edu/
612-624-3333
Giving to medicine and health at the University of Minnesota

Keeping current

How to ensure that your benefits are distributed as you intended

You can have the most up-to-date will or living trust, but if your beneficiary designations on life insurance and retirement plans are not current, much of your planning could be undone. Consider:

  • Under federal law, a surviving spouse is automatically the beneficiary of a 401(k) plan. This is true despite what a will or prenuptial agreement states — or even what the beneficiary designation provides. If a widow or widower remarries, the new spouse will be entitled to the funds, unless a spousal consent waiver has been properly executed.

  • Unlike a 401(k) account, an IRA does not automatically pass to a surviving spouse. Instead, the beneficiary designation on file with the IRA custodian dictates how the funds will pass. This could create a problem if the named beneficiary is deceased at the IRA owner’s death or if the beneficiary is no longer married to the IRA owner.

  • Named beneficiaries of IRAs can take advantage of the ability to stretch out the receipt of income — and the payment of taxes — over their lifetimes. For example, if a 27-year-old grandchild is named the beneficiary of a $100,000 IRA, he or she need only take about $1,780 the first year, allowing the balance to continue growing. Each year’s required distribution will be based on the account balance and the grandchild’s remaining life expectancy. This option is available only for named beneficiaries, however, so it is important to keep designations current.

  • Life insurance generally passes to the beneficiary named on the policy. Owners who marry, divorce, or have other life changes should review beneficiary designations to ensure that they still reflect the owner’s wishes.

  • Keep in mind that you can name the Minnesota Medical Foundation (MMF) as the beneficiary of all or a part of your life insurance or qualified retirement plans. Your estate will be entitled to a charitable deduction for any amounts we receive, and any income taxes that might be owed by other recipients will be avoided.

To learn more, please contact Jay Kautt on MMF’s planned giving team at 612-626-0510 or j.kautt@mmf. umn.edu, or visit www.mmf.umn.edu/giftplanning.

You can make a difference

Help the University of Minnesota save lives, inspire hope, and prepare the world’s future health care leaders. Make a gift today.

Because with your support, anything is possible.


Make a Gift

Your gift is an investment in a healthier tomorrow!
Give Online  |  More Ways to Give