What will you do with your unspent retirement savings?
Kathleen: We both had a lot of money in our IRAs, more than we could ever use. We considered leaving our IRAs to our children.
Don: 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.
Don and Kathleen's advisor created a plan that stipulated their stocks and home would go to their children. He then recommended they give their retirement assets to their favorite charities. These charities would receive these assets tax-free.Don: 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.
Don: It was easy to make designate charities as the beneficiaries of our IRAs. We filled out the forms online with our IRA account holder. We allocated a percentage of our shares to each charity.
Kathleen: 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 help our favorite charities.
Kathleen: 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 help our favorite charities.
Is a gift of an IRA to charity right for you?
Your retirement plan is probably among your most valuable assets. While it's 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 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 to leave to charity and which assets to leave to family, please contact us. 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.