Retirement Plan Beneficiary Designations

Naming a charitable organization as beneficiary of your IRA, 401(K) or other qualified retirement plan may offer substantial tax benefits. You continue to take regular withdrawals and the balance of the assets, upon death, can then be passed to the charity. You maintain the flexibility to change beneficiaries if your family’s needs change during your lifetime. Tax benefits that may apply include helping your heirs to avoid double taxation on the assets left in the retirement account.

IRA Required Minimum Distributions

Thanks to the permanent passage of the PATH Act, people aged 70 ½ and older may gift up to $100,000 of IRA assets directly to the charity of their choice without the money being included as income for tax purposes. Spouses may also participate if they have a separate IRA, giving married couples the opportunity to donate up to $200,000.

The distribution can count towards the required minimum distribution for those aged 70 ½ and older. This offers distinct tax advantages over taking a taxable distribution and then making a charitable donation with the proceeds.

By donating IRA assets to charity, beneficiaries/heirs are not burdened by the potential taxes associated with receiving IRA assets upon your death.