Beneficiaries

“The easiest way to make an extraordinary gift.”

Name Beneficiaries to Your Financial Accounts

The easiest way to make a legacy gift is through a beneficiary designation of a retirement account, investment, or bank account – or even a life insurance policy. Unlike a will or trust, you don’t need to consult an attorney… all you need is a legal name and Tax ID number.

The majority of these financial vehicles are not governed by your will or trust, which means that you need to name a beneficiary for each account even if you have a will. What’s more, many of these accounts are heavily taxed if left to individual heirs, so they can be a great way to make a large charitable gift at no cost to you now (and with no tax bill attached for your family later).

Be sure that your beneficiary designations name the correct persons or charities, and revisit them periodically to make sure your intentions will be followed.

Retirement Accounts

It’s likely that you have a retirement account, such as a 401(k), 403(b), or IRA. Because these plans are not governed by your will or trust, you fill out a simple form, indicating who should receive the funds after you are gone.

You can name individuals as your beneficiaries. However, because these plans are heavily taxed when left to heirs other than your spouse, this is a great asset to leave to your favorite charity. Charities like Mercy Home are tax-exempt, which means that your full gift will be used to help children in need. It just might be the easiest (and wisest) way to make an extraordinary gift to charity.

To update the beneficiaries of your retirement account, just visit your plan’s website, or contact your plan administrator to find the beneficiary form. You will typically need only three pieces of information to name Mercy Home as a beneficiary of your retirement account:

  1. Our legal name: “Mission of Our Lady of Mercy, Inc.”
  2. Our Tax ID number: 36-2171726 (Enter this in place of a Social Security Number)
  3. Our mailing address:

Mission of Our Lady of Mercy, Inc.

1140 W Jackson Blvd

Chicago, IL 60607

Transfer on Death (TOD) and Payable on Death (POD) Accounts

If you have a typical checking or savings account at a bank, an investment account with a brokerage firm, or even a certificate of deposit or money market account, you can name beneficiaries of each through a TOD (Transfer on Death) or POD (Payable on Death) Account.

TOD and POD accounts automatically transfer assets to a named beneficiary when the original account holder dies. Both POD and TOD agreements offer quick means of dispersing assets, as both avoid the probate process, which can take several months. This means that you can simply name a beneficiary without an attorney, and these assets will be kept out of probate court entirely. Some more information on how these types of beneficiary designations work:

  • Transfer on Death (TOD) accounts generally refer to assets found in a brokerage account, such as stocks, bonds, mutual funds, or other investment assets. Similar to naming a beneficiary of your retirement account, a TOD is typically a one-page form that you fill out with name, address, and tax ID number for each beneficiary.
  • A Payable on Death (POD) account is very similar to the TOD arrangement above, but deals with a person’s bank assets, such as a savings or checking account, certificate of deposit, or a money market account. Contact your bank to learn more about how to name a beneficiary of your account assets without going through probate.

Life Insurance

Life insurance provides for your family by replacing lost income and covering additional expenses should something happen to you. But perhaps you have an old policy that you no longer need to provide for your family. Just like your retirement accounts, you can name Mercy Home as the beneficiary of your life insurance policy, which could have a tremendous impact on the young people at Mercy Home who would benefit from your generous gift.

There are two ways to make a legacy gift with an existing life insurance policy:

  1. Contact your policy holder, request a change of beneficiary form, and change the beneficiary to Mercy Home. Follow the instructions listed above for naming Mercy Home as a beneficiary of your retirement plan.

    or
  2. Make Mercy Home the owner of your policy, and receive an immediate tax benefit for doing so. You’ll need to contact your policy holder for more information about this strategy, but it might be mutually beneficial for you, your family, and the young people of Mercy Home.

Read this blog post to learn more about securing your legacy.

Turn to page 8 of our Waifs messenger to learn more about leaving your legacy.

Further Reading

Estate Planning Roundtable, including Director of Philanthropy Phil Zielinski.

Planning Your Legacy, a free estate planning guide.

Useful information and contact the team

Meet the Team

Philanthropy Team Collage

Have unanswered questions? Let our knowledgeable philanthropy team help out!

Legal Name:
Mission of Our Lady of Mercy, Inc.

Employer Identification Number (EIN):
36-2171726

More information for financial professionals.

Philanthropic information presented herein is intended for friends and supporters of Mercy Home for Boys & Girls. This material may be helpful in your tax and financial planning, and is based on current laws and recent court decisions. You should consult your own legal, tax, or financial planner to determine how these gift vehicles may apply to your own situation.

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