Your retirement fund can be taxed up to 70% if passed on to heirs, yet it’s tax-free to charity. Often, between paying taxes and receiving a deduction, using a lifetime withdrawal to make a gift to charity is a “wash” for tax purposes.
A gift from your retirement account is for you if…
If the largest asset in your estate is your retirement plan, such as a 401(k), IRA, or Keogh, you may be surprised to learn that the IRS will impose income tax on the remaining balance in the account if you designate it to a beneficiary other than your spouse.
The income from the after-death distribution of a tax-deferred retirement plan to an heir is taxable as income and is in addition to the estate tax that may be imposed on the account. For estates fully subject to the estate tax, the result can be that up to 75 percent of the value of your retirement plan will be consumed in taxes before your child, relative or friend receives it.
There is a sensible charitable alternative:
Name Audubon as the beneficiary of your retirement plan, then use other assets not subject to income tax to make gifts to your heirs. The National Audubon Society, Inc., as a qualified 501 (c)(3), won't pay income tax on our distribution and your heirs will receive their share of your estate without the burden of extra taxes.
Office of Gift Planning
National Audubon Society
225 Varick Street, 7th Floor
New York, NY 10014