What Will You Do with Your Unspent Retirement Savings?
Kelly: We both had a lot of money in our IRAs, more than we could ever use. We wondered if we could pass this on to our children.
Michael: Our advisor explained the problem with giving our retirement savings to our family. He said a majority of the gift would be taxed. We didn't want our children paying any more in taxes than they already pay.
To alleviate their concerns, Michael and Kelly's advisor created a plan that stipulated their stocks and home would go to the children. He then recommended a bequest of the retirement assets be left to The Community Foundation. He explained that The Community Foundation would receive all the assets from their IRAs tax-free, maximizing their charitable gift, and that The Community Foundation would use the charitable assets according to their instructions.Michael: Our advisor explained the problem with giving our retirement savings to our family. He said a majority of the gift would be taxed. We didn't want our children paying any more in taxes than they already pay.
Michael: It was easy to make bequests from our IRAs to The Community Foundation. We filled out the online forms on our custodian's website that permitted us to allocate percentage shares to charitable causes.
Kelly: This plan met all of our goals. We liked the fact that our children could immediately sell the house and stocks with little or no tax due. We were also happy to know that The Community Foundation will use our IRA assets to carry out the charitable purposes we designate.
Kelly: This plan met all of our goals. We liked the fact that our children could immediately sell the house and stocks with little or no tax due. We were also happy to know that The Community Foundation will use our IRA assets to carry out the charitable purposes we designate.
Is a gift of an IRA to charity right for you?
Your retirement plan is probably among your most valuable assets. While the retirement asset is a great asset for you, it may not be the best asset to leave to children. If you have a taxable estate, your IRA or 401(k) plan will be subject to the estate tax, and any distributions to children will also be subject to income tax. That is why many tax planners suggest leaving retirement plans to charity. This gift will produce an estate tax deduction and the charity will not have to pay the income tax on the gift.
If you are in the process of determining which assets are "good" assets to leave to charity and which assets might be "good" to leave to family, please give us a call. We can help you with estate planning strategies that will reduce your taxes and allow you to maximize the gifts you leave to family and charity.
*Please note: The names and image above are representative of a typical donor and may or may not be an actual donor to our organization.
WHAT WOULD YOU LIKE YOUR GIFT TO ACCOMPLISH?
When you entrust your charitable gift to The Community Foundation, you have the flexibility to designate the purpose of your gift, and the confidence that The Community Foundation will carry out your plans for generations to come. Your gift can support a specific organization or cause, such as education or the arts, create a charitable fund that involves your children and grandchildren in a family tradition of philanthropy, or provide funds that The Community Foundation will use to address the changing needs of our community.
