IRA

Did you know that using your IRA for a charitable gift can reduce or eliminate the potential end-of-life "double tax?"

There are traps in retirement planning that most people are unaware of. Your retirement plan is probably an important asset for you. With good planning, you anticipate that you (and your spouse) will not exhaust the plan in your lifetimes. This could be a substantial asset to pass on to your heirs.

Video: Learn more about IRAs

Retirement plan assets (e.g., an IRA, 401(k), or any other qualified plan) may be subject to a double-tax at the end of lifetime. The assets may be included in your taxable estate to calculate estate tax liability. They may also be subject to income taxes on the individual income tax return filed for the year of your death. The interrelationship of those taxes may generate a tax cost of as much as 70% of their value. While a qualified rollover of the plan assets may defer some of this tax cost, it does not eliminate it. In effect, the government will be paid its taxes either at the end of your lifetime or sometime in the future.

By thinking charitably, your heirs may actually come out ahead. For example, if you intended to include charitable bequests as part of your estate plan, naming HIAS as beneficiary of some or all of the qualified plan will avoid all income and estate taxes. HIAS would qualify to receive the intended amount in its entirety, at no tax cost.

Have you already prepared a gift of a retirement plan naming HIAS as a beneficiary? Let us know by completing our Declaration of Intent.