Retirement Assets Can Be Designated to Charities
If you’re looking for ways to support charitable organizations in your estate plan, you should consider leaving retirement assets to a charity or cause of your choosing.
Retirement assets are often among the highest-taxed assets in an estate, so if you are looking for ways to reduce your potential estate tax liability. The primary advantages of choosing this route to charitable giving are:
- Reducing your tax hit: While the amount of the gift will be included in your taxable estate, your estate will receive a deduction for the amount received by the charity, resulting in an offset of the federal estate taxes. Also, giving that asset to a person, will cause them to be taxed on that asset as income after they receive it.
- Increased financial impact for the organization: A qualifying charity would not be required to pay any income taxes on the distribution from your retirement account. This results in more money to the organization, making it a win/win giving strategy.
You should confirm with your plan provider, financial advisor or your estate planning lawyer that your beneficiary designations are up-to-date. Failure to do so could result in your wishes not being fulfilled or severe tax consequences.
You should also make sure to contact the administrator of your retirement plans for any information or rules regarding your beneficiary designations.
For more information about how you can designate your retirement assets to a charity, contact an experienced Tampa, Florida estate planning lawyer at BaumannKangas Estate Law.