Many people do not know that when retirement plans such as pension funds, 401(k)s, and IRAs are left to an individual other than a spouse, they can be subject to income taxes and estate taxes. The two taxes combined could erode up to 80% of the remaining benefits!
If bequeathed to the Library, these funds would escape all income and estate taxes, thereby reducing the size your total taxable estate. The Library would receive 100% of the remaining benefit in your retirement plan, and the assets in the plan would be removed from your taxable estate. If you are planning to include the Library in your estate plans, the most effective way to do so is to leave all or part of your retirement plan to the Library, setting aside other assets for family and friends. Naming the Library as beneficiary of your retirement plan is easy: you need only to contact the administrator of your retirement or insurance plan and inform them that you wish to give all or part of the remainder to The Friends of the Rowley Public Library, Inc.
If you own a life insurance policy that is no longer needed for the protection of your family or for other purposes, you may use it to make a gift to the Library. The simplest way to give a life insurance policy to the Library is to name the Library as the owner and irrevocable beneficiary of the policy. In doing so, you qualify for an income tax deduction for the cash value of the policy. Alternatively, you could name the Library as the beneficiary of the policy. In this case, your estate would be entitled to an estate tax deduction equal to the value of the policy.
For more information, please contact an Executive Officer of the Friends.