PLANNED GIVING
NAMING A CHARITY AS BENEFICIARY OF YOUR IRA

Doesn't your IRA look great on paper? That monthly, or quarterly, or annual statement with all those dollar signs and zeroes it just gets bigger every year and it all belongs to you!

Or does it? Not all belongs to you some of it belongs to Uncle Sam and someday he will come for his share (taxes) and they must be paid! OR DO THEY?

When you name a charity as beneficiary of an IRA or other retirement plan, the account passes to the charity totally free of income taxes and estate taxes. Thus, leaving retirement benefits to your favorite charity is an excellent and tax-efficient way to carry out your charitable intentions. The funds in those plans are worth 100 cents on the dollar to a charity, but not to your family, who will have to pay a tax on the distribution.

Of course, when you leave an IRA to your favorite charity, your family does not get any benefit from the IRA. But if you are thinking you would like to leave a bequest of some type to charity, your retirement plans are the first place to look. So if you would like to leave some assets to family beneficiaries and some to charity, consider leaving the retirement benefits to charity and the other assets to family members.

Another avenue to investigate is leaving retirement assets to a charitable remainder trust. Under this type of trust, the trust receives the benefits income tax-free, then pays a life income to family members you choose (such as a spouse, or your children). When the family members have died, the trust assets pass to the charity. Charitable remainder trusts are complex and involve drawbacks as well as advantages, be sure to consult a knowledgeable advisor if you would like to pursue this option.

Education is your most important tool we have. Let your donors know what options are available to them. HELP THEM to HELP YOU!

By ADO member ROBBY MORRIS, Insurance and Personal Planning, The Morris Group, 914-273-6301; www.robbymorris.com; morrisrw@ft.newyorklife.com.