Retirement Plan Assets: Case Study

The following is an illustration of how this type of donation works.

A single mom with two kids learns the smart way to give retirement plan assets.

Challenge: Nancy is a single mom with two small children. She has two main estate planning goals: to leave an inheritance for her children and to leave a legacy in support of her community. Recently she met with her attorney for professional advice. Her question: "How can I meet my goals with maximum benefit for my children and my community?"

Solution: Nancy went into the meeting thinking that her IRA should go to her children. But the attorney pointed out that even though both children were still young, they have the potential to be in higher marginal tax brackets when Nancy passes away. If so, a large share of their inheritance would be subject to income taxes and significantly reduced. As a result of this meeting, Nancy changed her plans and named a charitable organization within her community as the beneficiary of her IRA and gave the remainder of her estate assets, which includes appreciated stocks, to her children.

Quick Tip
Leaving charity part or all of your IRA is easy and without cost—just ask your retirement plan administrator for a beneficiary designation form.

Benefits

• Nancy's children avoid having to pay heavy income taxes were they to inherit her IRA.
• When Nancy's children inherit their mother's stocks, the law says that when they sell them, they will pay capital gains taxes only on any appreciation from when they received the inheritance, not from the original cost basis.
• Nancy can feel confident her children will inherit assets that are not exposed to heavy income taxation while she supports her favorite charity with a gift that, because of its status as a qualified charitable organization, will be received tax-free.

Giving retirement plan assets to PETA shields your loved ones from taxes and frees you to give them other assets that are not as heavily taxed.

	Request a free guide to learn more about how a gift of retirement plan assets works.

Please contact Tim Enstice at 757-962-8213 or plannedgiving@peta.org if we can answer any questions you have about this way to support our work.