In order to illustrate what can happen, assume a person has a large estate and a qualified retirement plan totaling $1,000,000 at death. Unaware of the tax consequences, Mr. Donor has bequeathed this asset directly to his children. What is often overlooked is the multiple tax bites that may occur in a situation like this. It is clear that retirement planning incentives have been designed to create funds for retirement, but not designed to create funds for inheritance.

An IRA to children may result in as little as 30% of the funds reaching the children. However, just as our tax laws encourage retirement planning, they also contain attractive benefits when charitable organizations are on the receiving end of qualified retirement plans.

For those with charitable intent, it is often attractive to consider a bequest of either a portion or all of the funds in a qualified retirement plan to charity.

Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your IRA gift benefits under federal rules may be different from this person, you may want to contact us to discuss an IRA gift.

The 2010 IRA charitable rollover passed the House and awaits Senate approval. It is not currently available. Because it is very likely to pass this year, we ask you to continue to plan for a potential IRA charitable rollover in the fall of 2010. To learn more click here.