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8 Smart Ways to Give Through Beneficiary Designations—and Their Tax Benefits

Beneficiary designations are one of the simplest, most powerful ways to support Nazarene Bible College.  By naming NBC as the beneficiary of certain assets, you can leave a lasting legacy—often with significant tax advantages.

Why Choose Beneficiary Designations as Part of Estate Planning?

• It’s easy to set up—involving just a beneficiary form.
• The assets remain yours throughout your life.
• Probate is avoided and it simplifies estate settlement.
• It potentially reduces estate and income taxes.

Common Options for Designating NBC as a Beneficiary:

1. Retirement Accounts (IRA, 401(k), 403(b))

• How it works: Complete a beneficiary form with your plan administrator to name Nazarene Bible College as a full or partial beneficiary.
• Tax benefit: NBC pays no income tax on inherited retirement funds, unlike individual heirs which makes this a tax-wise gift arrangement. Your estate may also qualify for a charitable deduction, reducing estate taxes.

2. Life Insurance Policies and Commercial Annuities

• How it works: Name NBC as a full or partial beneficiary of your policy using a simple change-of-beneficiary form.
• Tax benefit: The death benefit passes tax-free to NBC, and your estate may receive a charitable deduction.

3. Donor-Advised Funds (DAFs)

• How it works: Designate your DAF as beneficiary of retirement assets or insurance, then recommend grants to Nazarene Bible College.
• Tax benefit: Assets transfer tax-free to the DAF, allowing flexible, multi-year charitable giving while promoting multi-generational planning.

4. Bank Accounts (Payable-on-Death)

• How it works: Add a “Payable-on-Death” designation to your checking or savings account.
• Tax benefit: Avoids probate and passes funds directly to NBC without estate tax impact.

5. Brokerage Accounts & Securities (Transfer-on-Death)

• How it works: Use a “Transfer-on-Death” form for stocks, bonds, or mutual funds.
• Tax benefit: No capital gains tax for NBC; your estate may receive a deduction.

6. Real Estate

• How it works: In many states, you can use a Transfer-on-Death deed to donate property to a charity like NBC.
• Tax benefit: Property transfers outside probate; NBC avoids capital gains tax on sale.

7. Charitable Trusts as Beneficiary

• How it works: Name a charitable remainder trust (CRT) as beneficiary of your IRA. The trust pays income to loved ones for life, then the remainder can be left to NBC.
• Tax benefit: Reduces estate taxes, provides income for heirs, and benefits NBC long-term.

8. Wills and Living Trusts

• How it works: Although not beneficiary designations in the narrow sense, wills and living trusts often include residuary, specific, contingent, or percentage bequests to NBC as part of legacy plans. This means you can gift a specific dollar amount or a percentage of your estate.  You can also make a gift from the balance or residue of your estate.
• Tax benefit: Depending on the size of your estate, you may potentially reduce the burden of taxes on your family and your estate may receive tax savings.

A Lasting Legacy

By naming Nazarene Bible College as a beneficiary through one of these methods, you create a legacy that reflects your values while maximizing tax efficiency. These options allow you to retain control of your assets during your lifetime, avoid probate, and often reduce estate and income taxes—ensuring more of your resources go directly to ministry rather than to taxes.

Utilizing these gift arrangements will help equip future leaders for service and strengthen the mission of Nazarene Bible College for generations to come. It’s a simple, meaningful way to make an eternal impact while caring for your loved ones and stewarding your resources wisely.

- Tim Keeton serves as Vice President for Development at Nazarene Bible College.