Joanne and her late husband Hal had been longtime supporters. Recently, Joanne's children encouraged her to update her estate plan. Joanne thought that was a great idea. In fact, she had been thinking about meeting with her attorney to discuss how she could make a significant gift to support her favorite charity.
Joanne: Hal and I were passionate about commitment to our community. We even volunteered regularly. After Hal passed away, I wanted to make a gift that would honor his memory.
When she met with her attorney, Joanne explained her goals and described her assets. She'd inherited Hal's IRA, which when combined with her own, would provide her with the necessary retirement security she needed. She even had enough to allow her to take regular vacations and splurge on gifts for the grandkids.
Joanne: I had originally thought about leaving my IRA to our kids and other assets to charity. My attorney suggested a different strategy and told me that an IRA is a great gift to leave to charity. He explained that if my kids inherited the IRA, the value of the account is includable in my taxable estate for estate tax purposes and the money from the inherited account may be taxable income depending on the type of IRA and whether the contributions were pre-tax or post-tax. But, by giving the IRA to charity and other assets to my kids, the kids will still receive a nice inheritance, and we avoid income and estate taxes!
Joanne: Making a gift of my IRA was easy! I contacted my IRA custodian, who emailed me an IRA beneficiary designation form. I completed the form, named my organization as the primary beneficiary of my IRA and mailed it back to the custodian. I called to tell them about my gift, and they were very touched. I know Hal would be happy too. Best of all, I can continue to use my IRA for as long as I live, and when I pass away, my IRA will go to charity.
Is a beneficiary designation gift right for you?
If you own a qualified retirement plan, such as an IRA, 401(k) or 403(b) and would like to make a charitable gift, your family or your estate might benefit if you update your beneficiary designation form naming our organization as a beneficiary. Beneficiary designation gifts may help your heirs avoid paying income tax on certain inherited assets and may help your estate avoid estate taxes.
If you have questions about making a beneficiary designation gift, please contact us. We would be happy to work with you and answer any questions that you have.
*Please note: The name and image above is representative of a typical donor. Since the benefits of each gift may be different, you should seek the advice of your legal, tax or financial advisor.