"How to Best Leave an IRA to Charity"

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"How to Best Leave an IRA to Charity"

Post by gkaplan » Sat Aug 12, 2017 7:37 pm

Question: I want to leave my estate, which includes a substantial IRA and other assets, to a collection of individual and charitable beneficiaries in varying percentages. Some of the charities are big and some are small churches or 501(c)(3)s. It would make sense to fund the charities' shares with the retirement benefit asset (the IRA) because the charities will pay no income tax on the IRA proceeds, whereas if the individuals' shares are funded with IRA assets their net inheritance will be reduced by income taxes. Is there a way to accomplish this? . . . .

http://news.morningstar.com/articlenet/ ... ?id=821648

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Re: "How to Best Leave an IRA to Charity"

Post by ThePrune » Sat Aug 12, 2017 7:45 pm

Sure, simply add the charities to the list of beneficiaries for the traditional IRA account. You'll need to supply some unique identification information (I seem to remember supplying the taxpayer identification number of the charity, but it may have had a different name). The beneficiary forms at both Vanguard and Fidelity allow you to specify percentages to each beneficiary.
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Re: "How to Best Leave an IRA to Charity"

Post by lazyday » Sun Aug 13, 2017 4:44 am

"We can't deal with you because you are not our customer. Before we can give you any of the IRA money, you must first open an inherited IRA account with us.
opening an inherited IRA is not necessarily easy for a charity
Maybe I should move my traditional IRA accounts to one firm. If anyone knows how easy it is for charities to claim assets from Vanguard, Schwab, Fidelity, Wellstrade, or Merill Edge, please post.

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Re: "How to Best Leave an IRA to Charity"

Post by Chip » Sun Aug 13, 2017 5:15 am

This is interesting. And since Natalie Choate is the author I am definitely paying attention.

I currently have the setup that ThePrune describes. I had never considered the difficulty the receiving organizations might have in actually getting their hands on the bequests. So I'm going to explore the DAF option she describes.

Fidelity has some information about how to name their DAF as a beneficiary here. I haven't yet found information on exactly how to provide them with instructions on which charities should receive the distributions post-death.

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