Benefits of gifts by beneficiary designation
Here’s why a beneficiary designation gift might work for you to leave a legacy to help end lung disease for future generations:
It’s quick and easy. You simply fill out a form, and it doesn’t require a visit to an attorney.
Taxes can be reduced or even eliminated on certain assets.
It can reduce or avoid probate fees.
There’s no cost to you today. You retain full control of your assets for as long as you need them.
Types of gifts by beneficiary
Bank Accounts, CDs, Brokerage Accounts, and Commercial Annuities
This is one of the easiest gifts to give and one of the most useful in accomplishing what you want—stopping lung disease. Simply fill out a beneficiary designation form in person or online to name the American Lung Association (Tax ID: 13-1632524) as the beneficiary of a checking or savings bank account, a certificate of deposit (CD) or a brokerage account. You can decide what percentage of the account you would like to go to the American Lung Association (any percentage up to and including 100%). When you do, you’ll take a powerful step toward a world free of lung disease for generations to come.
Example:
Jane and Frank are longtime supporters of the American Lung Association. When it came time for them to plan their estate, they knew that they wanted to make improving lung health and preventing lung disease part of their legacy. After exploring several options, they decided to leave their bank account to the American Lung Association through beneficiary designation, resulting in several benefits:
- Reducing estate taxes for their heirs: By designating a charity as the beneficiary of their bank account, Jane and Frank’s estate would receive a charitable tax deduction. This would ultimately reduce the taxable amount of their estate, allowing more of their assets to go towards causes they believed in.
- Avoiding probate: The process of probate can be lengthy and expensive. By using beneficiary designation, Jane and Frank could bypass this process altogether and ensure a smooth transfer of assets to the American Lung Association.
- Maintaining privacy: Unlike a will, which becomes public record after death, beneficiary designations are kept private. This meant that Jane and Frank’s charitable giving would remain confidential.
Retirement Fund Gift
You can name the American Lung Association as a beneficiary of your retirement plan to help end lung disease and save more lives. Naming the American Lung Association as a beneficiary of your retirement account can be an attractive option for creating a legacy while reducing income and possibly estate taxes for your loved ones.
Example:
Jasper knew that he wanted to create a legacy that honored his wife Anne’s fight against cystic fibrosis. After discussing various options with his financial advisor, Jasper decided to leave a portion of his retirement fund to the American Lung Association through a beneficiary designation. This enabled him to realize several benefits:
- Charities do not pay income tax, so the full amount of Jasper’s gift from his retirement account could directly benefit those facing lung disease.
- With this type of gift, Jasper could divide his retirement assets between charities and heirs according to any percentage he chose. This allowed him to leave a portion of his retirement account to the American Lung Association and a portion to other charities focused on cystic fibrosis in honor of Anne.
- Leaving the money in his IRA to charitable beneficiaries resulted in more after-tax cash for his heirs.
- It reduced the amount of income taxes Jasper’s loved ones would have to pay on inherited assets.
- Jasper’s estate was eligible for a charitable deduction.
Savings Bonds
If you have bonds that have stopped earning interest and you plan to redeem them, you might owe income tax on the appreciation. That could result in your heirs receiving only a fraction of the value of the bonds in which you invested. However, you can avoid these taxes and save lives. Since the American Lung Association is a tax-exempt institution, naming us as a beneficiary means that the full value of your savings will go toward improving lung health and preventing lung disease.
Example:
Mark and Laura had been long-time supporters of the American Lung Association. When it came time to plan their estate, they knew they wanted to continue supporting the organization’s mission to ensure a healthier future for the next generation.
After consulting with a financial advisor, Mark and Laura learned about the benefits of leaving their savings bonds to the American Lung Association through a beneficiary designation. Their advisor cautioned that if you have bonds that are no longer earning interest and you want to leave them to your heirs, they may wind up paying income tax on the increase in value. This means your heirs could inherit a much smaller amount from your bond investment than you intend.
By giving their savings bonds to the Lung Association instead, Mark and Laura could ensure that their entire investment went towards improving lung health. It also allowed them to leave less heavily taxed assets to their heirs, thereby, maximizing their inheritance.
Donor-Advised Fund Residuals
What remains in a donor-advised fund (DAF) after your lifetime is governed by the contract you completed when you created your fund. In most situations, if you did not sign a beneficiary form, then your DAF custodian could choose to distribute the balance based on its own philanthropic priorities, which may not be the same as your own. When you name the American Lung Association as a successor of your account or a portion of your account value, you can secure your legacy of a world without lung disease.
Example:
Beth has been supporting the American Lung Association for many years through her donor-advised fund. When it was time to plan for the future, she decided to name the organization as a beneficiary of her account.
When Beth first created her donor-advised fund, she did so with the intention of supporting the causes she cared about — chief among them, lung cancer research. Beth had lost several loved ones to lung cancer, and wanted more than anything to join the fight against this devastating disease. Beth wanted to ensure that this important work continued beyond her lifetime, so she reached out to the Planned Giving team at the American Lung Association. They guided her in naming the American Lung Association as a beneficiary of her donor-advised fund in her estate plan, thereby creating her legacy as a lung cancer crusader.
How to update a beneficiary designation
To name the American Lung Association as a beneficiary of your retirement fund, bank account, donor-advised fund or other asset, simply follow the steps below:
- Please notify us of your intended future gift, so we may thank you.
- Login to your account or request a Change of Beneficiary Form from your custodian (the business holding your money or assets).
- Follow the links to change your beneficiary or fill out the form.
- Complete the form using the correct spelling of our name (American Lung Association), address (55 W. Wacker Drive, Suite 1150, Chicago, IL 60601), tax identification number (13-1632524), and email (estate.admin@lung.org)
- Save or submit your information online or return your Change of Beneficiary Form.