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Back to basics: Retirement plans and life insurance can fuel meaningful bequests

Your client’s fund at the Community Foundation of Anne Arundel County (CFAAC) can be an ideal recipient of estate gifts through a will or trust, or through a beneficiary designation on a qualified retirement plan or life insurance policy. 

Bequests of qualified retirement plans can be extremely tax-efficient because charitable organizations such as CFAAC are tax-exempt. This means the funds flowing directly to a client’s fund at the Community Foundation from a retirement plan after the client’s death will not be reduced by income tax. This also means the assets will not be subject to estate tax. 

Don’t overlook life insurance, either. Your client may want to consider designating a fund at CFAAC as the beneficiary of a life insurance policy.

CFAAC makes it easy for you to draft bequest terms in legal documents, including beneficiary designations of retirement plans and life insurance policies. Please contact our team for the exact language to ensure alignment with your client’s intentions. 

Keep in mind that even after a client has executed estate planning documents or beneficiary designations, in many cases the client can update the terms of the fund at the Community Foundation designated to receive the bequest upon the client’s death. Clients will appreciate  you bringing this technique to their attention as well as its ease and flexibility.


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