 |
|
|
|
|
Gifts of Retirement Plans
Estate and income taxes can significantly diminish the value of a retirement account. When a donor names the Archdiocese of New York as a beneficiary, co-beneficiary, or contingent beneficiary of an Individual Retirement Account (IRA), Keogh Plan, 401(k), 403(b), or other qualified pension plan, his or her estate receives a charitable deduction for the full amount of the funds received from these accounts. Since tax burdens on estates may be reduced, heirs may receive increased amounts from other assets directed to them.
IRAs, for instance, can be subject to estate taxes as high as 47%. Contributing an IRA to a Charitable Gift Annuity is another way of earning interest on the full pre-tax amount. And at 47%, this can make a big difference to your heirs: it can provide real security to them Ð all while supporting charities you care about.
Example: Maria Verdi, a widow, has $1 million in a qualified retirement plan, with an entire estate in excess of $4 million. Maria wants to leave $1 million to the Archdiocese of New York and the balance of her estate to her daughter, Martha. If Martha received the entire retirement-plan assets, she would pay income tax on the $1 million less the amount of federal estate tax (currently, the rate is 45% and the amount due would be $450,000). If Susan is in the 30% income tax bracket, she will also pay $165,000 in income tax. This would leave her a net inheritance of $385,000 ($1 million, less $450,000, less $165,000). Maria would better provide for Martha by leaving non-qualified retirement plan assets and making a charitable gift to the Archdiocese of New York of the retirement-plan assets.
For more information on gifts that benefit your heirs as well as the causes in which you most believe, call 212-371-1011 ext. 3317. Or e-mail gift.planning@archny.org
|
|
|
|
