Assets in a retirement plan account, either an employer provided or personal IRA, can be a great source for a gift to Simpson.

The principal advantage of donating retirement plan assets is the avoidance of income taxes as well as estate taxes. Since the funds in a qualified plan usually represent deferred compensation, giving the assets to individual heirs may trigger a total effective marginal tax rate that is incredibly steep -- even exceeding 55% in some cases.

Avoiding tax impact
After your lifetime, the undistributed balance in a retirement plan account will have to be distributed and taxed to someone else, either to your estate, or to a designated beneficiary. Because Simpson College is tax-exempt, the deferred income in your qualified retirement plan account may never be taxed when you name the college as the ultimate beneficiary.

Professional estate planners know that the best assets to transfer to Simpson are normally those items that generate "income in respect of a decedent," a term used by the IRS to denote assets subject to income tax in addition to estate tax. The largest income source in respect of a decedent will usually be one's retirement plan.

By making Simpson the beneficiary of your plan, you can make sure that 100% of your retirement plan assets will support your specific philanthropic objectives -- at a relatively small cost to your individual heirs.

How to donate a retirement account
To leave the balance of a retirement account to Simpson after your lifetime, simply advise the plan administrator of your wish and complete any forms required. For an IRA or Keogh plan you administer personally, notify the custodian in writing and keep a copy with your valuable papers.

Perhaps you want your children to benefit from your retirement account, too. In that case, designate a specific amount to be paid to Simpson, before the division of the balance among your children.

Eight free booklets are available on the subject of retirement planning. Order here.