MAKING A GIFT OF BENEFICIARY PROCEEDSMAKING A GIFT OF BENEFICIARY PROCEEDS

One of the simplest ways to make a charitable gift is to designate the LCF as the beneficiary of an IRA, tax sheltered annuity, or 401(k) or 403(b) plan. Beneficiary proceeds directed to charity are not subject to income or estate taxes, typically referred to as “double tax”, providing significant tax advantages to the givers and their families. These assets may also be used to fund a charitable remainder trust at death to benefit a spouse or the family.

When a donor names the LCF as beneficiary of specific assets, he or she enjoys some flexibility and simplicity in giving, including the ability to:

Change this designation throughout life;
Designate all or a portion of the assets to the LCF;
Designate the Foundation as beneficiary without the help of an attorney.

Upon the donor’s death, assets are directed to the charitable fund created by the donor to benefit his/her recommended charities.

Target Audience

  • Clients who need the retirement income while living, but wish to benefit charity with any remaining value upon death.
  • Clients who want the option to change this designation down the road.
  • Charitably-minded clients who have no heirs to benefit from their estates.

Tax and Financial Benefits for Your Clients

  • The amount designated to charity is given free of federal estate tax.
  • The Foundation receives the specified assets upon the donor’s death, allowing for a potential charitable deduction against estate taxes.
  • Save up to 70% of the value of the asset from federal estate and income taxes.

Benefits to You, the Financial Representative

Helping your clients give through the LCF not only simplifies your work, you’re also compensated for your efforts. Thrivent Financial representatives receive compensation from Thrivent Financial for the beneficiary proceeds when they’re received and invested by the LCF (upon the donor’s death). In order to receive compensation, the FR must still be with Thrivent Financial when the proceeds are received by LCF.

You don’t need any special qualifications to facilitate gifts to the LCF, and we support you with the tools and information necessary to complete your client’s gift.

How to Designate the LCF to Receive Beneficiary Proceeds

  1. Donor completes a Fund Workbook.
  2. All gifts made to the LCF are placed in an existing charitable fund or one created by the donor. The first step in creating the charitable fund is to complete the Fund Workbook.
  3. Once the LCF receives a completed Fund Workbook, it drafts a document called a Fund Agreement. This document will be sent to the donor for signature and will be countersigned by the LCF. The purpose of this document is to list the charities the donor wishes to benefit and govern the administration of the donor’s perpetual fund. The donor may change the charitable beneficiaries at any time by revising the Fund Agreement.
  4. Donor signs a Fund Agreement.
  5. Donor Includes Foundation on Beneficiary Designation Forms
  6. The following language should be used: “Lutheran Community Foundation, a Minnesota nonprofit corporation, to be allocated to [INSERT FUND NAME].”

Resources to Support Your Work

You may also order these materials online, using our Request Materials form.

For more information about giving beneficiary proceeds and other giving options available through the LCF, please call 800/365-4172.