Beneficiary Designations

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• Retirement accounts

  Funds from retirement accounts are among the most highly taxed estate assets. For this reason, IRAs, 401(k)s, 403(b)s, Keough Plans, SEP IRAs and other retirement plans make great opportunities for charitable beneficiary designations.

  Unlike most other assets, retirement accounts do not receive a ‘basis step up’ on the account appreciation at the time of death. Your heirs will have to pay tax at ordinary income tax rates on distributions they receive from inherited IRAs. Because Covenant House New Jersey is a tax-exempt organization, IRA distributions received by Covenant House New Jersey are not subject to income tax. Designating Covenant House New Jersey as a beneficiary of your IRA or other retirement plans can mean that those funds will be used to establish your legacy of caring for our kids without being reduced by income tax.

• Bank accounts, DAFs & mutual fund and brokerage accounts

  Many different types of accounts such as bank accounts (either checking or savings), donor-advised funds & mutual fund and brokerage accounts can have ‘payable on death’ or ‘transfer on death’ Beneficiary designations.

• Life insurance

  Life insurance can also provide an opportunity for a charitable beneficiary designation. After many years, the original need that prompted the purchase of a life insurance policy may have passed, making the policy proceeds an asset that can be used for charitable giving.

  Covenant House New Jersey does not provide tax, legal or accounting advice. This material has been prepared for information purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors for such advice.