Goal: Avoid the twofold taxation on IRA or other employee benefit plans.
Benefit: Lets you leave your family other assets that carry less tax liability.
Contributions to retirement plans can provide an excellent opportunity for growth as they are invested tax-free. The earnings are taxed when they are withdrawn, but this has allowed more dollars to be invested for more growth. Additional savings can occur if the recipient is in a lower tax bracket when the funds are withdrawn (for example, during retirement) than when the investments were growing.
However, careful planning concerning the withdrawals from retirement funds needs to be done. Not only is there a potential income tax burden, but if there is a balance in your retirement account at your death, there may be estate taxes as well. Estimates are that taxes could eat up as much as 70-75% of retirement assets under certain circumstances.
Using qualified retirement plan funds is an excellent source of assets to fund bequests. By designating McLeod Health Foundation as a beneficiary (it can be a contingent beneficiary after the death of a spouse - see sample bequest language) funds pass to McLeod Health Foundation free of taxes. It is possible to set up the beneficiary as the recipient of the entire remaining funds in the account or establish a percentage to fund the bequest.
Please note - the designation of any charity as a beneficiary of retirement fund assets cannot be simply written in your will or trust. The charity must be designated as a beneficiary of the retirement plan.
Everyone's personal circumstances are different, so please consult your tax advisor concerning the use of qualified retirement funds. We would be glad to make suggestions that could be effective in accomplishing you and your family's needs and benefit McLeod Health Foundation as well.
Linda Russell was the child who wanted to save the world. Whether it was through Girl Scouts, her church youth group or simply bringing home stray puppies, Linda has always looked for ways to give back. These lessons were learned while growing up in a family always involved in charitable projects or helping those less fortunate.READ MORE
Dwight Jenkinson has been both a participant and a witness to the tremendous growth of McLeod Health over the last four decades. Yet, it was the personal recognition of a problem faced by cancer patients that led him to be a part of the solution. Dwight has been an important member of the McLeod family since 1957. Serving as interim Administrator, Dwight was instrumental in the establishment of McLeod RegionalRead More