Thursday, December 17, 2015

Retirement Account Gifts

By: Laurie Valentine-COO & Trust Counsel 

For many, one of the largest assets they may own is their IRA or other retirement account. And, unlike almost any other assets you own, there is potential for a double tax “hit” on the transfer of retirement account assets at your death.

The value of your retirement accounts are part of what is counted in determining if your estate owes any federal estate tax (first tax “hit”) and, if your family is named as the beneficiary/new owner of the retirement account, when family member beneficiaries take funds out of the retirement account after your death they will have to pay income taxes on what they take out (second tax “hit”) just like you did.

To avoid, or reduce, the double tax hit, consider using all or a portion of a retirement account to fund the gifts you want to make at your death to your church and other charitable causes important to you. The portion of the retirement account passing to charitable organizations provides your estate an estate tax charitable deduction and, since your church and other charitable beneficiaries are tax exempt, they do not have to pay income taxes on what they receive from your retirement account.

IRAs and retirements accounts….a great resource to use for giving you want to do at your death.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

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