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Donating Retirement Assets

Donating retirement assets


A direct contribution of retirement assets to CHAT as part of an estate planning strategy can be very tax efficient. Charitable donations of retirement assets can minimize the amount of income taxes imposed on both your individual heirs and your estate. 


Making a qualified charitable distribution. Many people hold retirement accounts such as an IRA or 401(k) but may find that, due to their other resources and investments, they are not in need of all the funds accumulated in their retirement accounts. You can donate to CHAT by taking a distribution from your retirement account, including the distribution in your income for that year. After accounting for any taxes associated with the distribution, you can contribute cash to CHAT. However, if you are age 70 ½ or older, you can contribute up to $100,000 from your IRA directly to CHAT and avoid paying income taxes on the distribution. 


Leaving a legacy through your IRA 

Consider naming CHAT as a beneficiary to receive your IRA or other retirement assets upon your death. There are considerable benefits to this option:

  • Neither you and your heirs nor your estate will pay income taxes on the distribution of the assets.

  • Further, your estate will receive a tax deduction for the charitable contribution, which can be used to offset the estate taxes.

  • CHAT is a registered 501 (3)(c ) and does not pay income tax, so the full amount of your retirement account will directly benefit the charity of your choice.

The process to designate CHAT as the beneficiary of an IRA or 401(k) is straightforward. Fill out a designated beneficiary form, which can be obtained through an employer, financial advisor, bank or financial services firm. Once the designated beneficiary forms are in place, the retirement assets will generally pass directly to your stated beneficiaries without going through probate.

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