Planned Giving

A Gift for the Future

Looking for easy ways to support the Women’s Resource Center during the holiday season?  Consider naming WRC as a beneficiary to your IRA or annuity. It’s simple to do and doesn’t require the services of a lawyer or financial planner.  What’s more, designating a charity as your IRA beneficiary offers numerous tax and philanthropic benefits. 

Assets Pass Tax-Free

One of the primary benefits of designating a charity as your IRA beneficiary is that your assets are not taxed as they pass to your beneficiary upon death. If you had designated an individual as your beneficiary, that person would be subject to ordinary income tax on any withdrawals from the IRA, which generally must begin immediately upon transfer. Unlike in regular taxable investment accounts, assets in an IRA do not “step-up” in basis. Rather, the entire amount of a traditional IRA is fully taxable at ordinary income tax rates. Passing some of your assets to a charity rather than an individual could save hundreds of thousands of dollars in assets.

Receipt of Living Benefits

Some IRA owners pledge their assets to charities in exchange for living benefits. Depending on the type of strategy used, you could receive annual income based on the interest earned in your account until death, as is the case with a charitable remainder unitrust. Upon your death, your assets would transfer tax-free to your charitable beneficiary. In addition, if you establish a charitable remainder unitrust you are permitted an instant tax deduction based on the present value of the account.

Avoidance of Estate Taxes

Although the assets in your IRA will technically remain as a part of your taxable estate even if your beneficiary is a charity, your estate will be entitled to a charitable deduction in the amount of the donation. The net of this is that your estate will not be liable for estate taxes on the amount of your IRA designated as a charitable contribution.

Philanthropy

If you designate a charity as your beneficiary, you will receive the same philanthropic benefits as if you had made a gift out of your taxable investment account. If your familial heirs, such as children or grandchildren, are already provided for, donating your IRA to a charity can provide you with the satisfaction that you have benefited others who would otherwise go needy. If you like, you can instruct the charity to establish a foundation, scholarship or program in your name so that your gift is remembered in perpetuity.

Interested in learning more?Call Michele Daly at: 610-687-6415