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Sep 1, 2010 12:00 PM
Are IRAs and Charities the Perfect Match?
A financial case study reveals the best strategy to accomplish your objectives
You own individual retirement account and non-IRA assets. You want a certain amount of your estate to pass to charity, and you want the charitable gift to be as tax efficient as possible to maximize the balance that will pass to your children (or other young heirs). You may have heard that your IRA is the “perfect match” for charitable giving because the pre-income tax dollars in the IRA can pass to charity with little or no income tax cost. You may also have heard that your IRA could be quite valuable if left to your younger heirs with “stretched-out” distribution planning under the minimum required distribution (MRD) rules. And lately, you've probably heard that Roth IRA conversions are all the rage. Which approach is the best fit for you? The answer might surprise you.
We developed the following case study to explore these questions. It compares several alternative strategies relating to charitable giving and evaluates the “success” of each strategy. The case study measures “success” by modeling investment performance, cash flow, income tax, estate tax and many other variables for each strategy over a 55-year time period and then calculating the pile of money that has accumulated for the children at the end of the period, net of all taxes and expenses.
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
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