Did you know that retirement accounts are exposed to federal income taxes that could be as much as 37% upon your death? The good news is that these taxes can be eliminated or reduced through a carefully planned charitable gift.
Consider leaving your loved ones less heavily taxed assets and leaving your retirement plan assets to the Conservancy of Southwest Florida to support our work. As a nonprofit organization, we are tax-exempt and will receive the full amount of what you designate to us from your plan. You can take advantage of this gift opportunity in several ways, illustrated on the following pages.
Use a charitable gift annuity (CGA) or charitable remainder trust (CRT) to stretch payments from retirement plan assets. The SECURE Act eliminated the “stretch IRA” and retirement plan assets must now be distributed to most non-spousal beneficiaries within 10 years. If you would like your beneficiaries to receive distributions over a lifetime and support the Conservancy of Southwest Florida, a testamentary CGA or CRT may be a solution. The income beneficiaries can receive lifetime payments. The remainder will support the Conservancy of Southwest Florida.
List the Conservancy as a beneficiary of your account.
The simplest way to leave the balance of a retirement account to the Conservancy of Southwest Florida after your lifetime is to list the Conservancy as the beneficiary on the form provided by your plan administrator. If you are married, your spouse must sign a written waiver.
Make the Conservancy a contingent beneficiary.
If you prefer to make your spouse the primary beneficiary of your retirement account, you can name the Conservancy of Southwest Florida as the contingent beneficiary. Want your children to benefit, too? Designate a specific amount for the Conservancy with the remainder for your children.
Give from your IRA.
If you are 70½ years or older, you can give any amount up to $100,000 from your IRA directly to a qualified charity such as the Conservancy of Southwest Florida without having to pay income taxes on the money. Beginning in the year you turn 73, you can use your gift to satisfy all or part of your required minimum distribution.
A longtime donor with a $1.5 million estate wants to leave the Conservancy of Southwest Florida a gift valued at $750,000. They also want to leave something to their only daughter who is in the 32% federal income tax bracket. Take a look at the options.
Option 1: Our donor divides assets equally between the daughter and the Conservancy.
|Other assets (house, securities, cash)||$375,000||$375,000|
|Federal income tax owed||($120,000)||($0)|
|Net amount to beneficiary after taxes||$630,000||$750,000|
Option 2: Our donor names the Conservancy the beneficiary of retirement plan assets and leaves the daughter all other assets.
|Other assets (house, securities, cash)||$750,000||$0|
|Federal income tax owed||($0)||($0)|
|Net amount to beneficiary after taxes||$750,000||$750,000|
For more information, please seek guidance from an estate planning attorney, a CPA or other tax professional. We would be happy to answer any questions regarding charitable giving that you or your advisors may have. Feel free to contact us at no obligation.
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.