Estate Planning > Planned Giving > Retirement Accounts

A donor has a retirement account that is needed to fund his and his wife’s retirement. He wishes to donate the residual value of the account to a charity after they both die. It has been determined that his retirement account could be subject to high income, capital gains, and estate taxes.

This donor can continue to receive retirement benefits through his retirement plan and reduce taxes by naming the charity as a beneficiary of the plan after his and his wife’s deaths. Distribution rules allow an individual to name a spouse as initial beneficiary for purposes of minimum distributions (minimum distributions may be smaller if the spouse is younger) and name the charity as the beneficiary to receive the remaining assets in the plan and eliminate the taxes associated with “income in respect of a decedent.” (An exception applies if your spouse is the sole beneficiary and is more than 10 years younger than you).

Retirement Account gifts can be funded from traditional IRAs, 401(k)s, 403(b)s, TSAs, or other retirement vehicles. While Roth IRAs do not create income taxes, they are included in estate value which may result in increased estate taxes. Retirement Account gifts can be made in a number of ways including Wills, Charitable Trusts, and plan beneficiary designations.

The Benefits

  • Potential growth of the retirement asset
  • Reduction of minimum distributions
  • Lifetime income for spouse
  • Reduction or elimination of “income in respect of a decedent,” capital gains and estate taxes
  • A generous, life-changing gift, to bless Israel through The Fellowship

Download or request a free copy of The Fellowship’s Planned Giving Ideas and Options Guide>>

Jason’s Retirement Accounts Story

Jason Stevenson, 74, is a university professor and retired Marine. Following two tours of duty, he went back to college, eventually receiving advanced degrees. He’s been teaching at a state university for 40 years and continues teaching on a part-time basis. His retirement account has reached over 1.5 million dollars. Jason and his wife, Sandra, have been married for almost 50 years and have generously supported The Fellowship for over 12 years. Jason consulted with his CPA and discovered that he could elect to follow the new IRA distribution rules and use a Unitrust to name his wife as the initial beneficiary, with smaller distributions. This allowed for more growth in his plan. Jason named The Fellowship as the residuary beneficiary of his plan. 		Planned Giving Options
Planned Giving Options

Read our Planned Giving Options guide and find the best way to realize your Estate Planning goals while blessing Israel through a legacy gift to The Fellowship.

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