About This Gift
As of January 1, 2020, non-spousal beneficiaries of your IRA must take all distributions from the account within ten years unless they meet the exceptions of being a minor child, disabled, chronically ill, or a person not more than ten years younger than the account owner. Making a Charitable Gift Annuity or Charitable Remainder Trust the beneficiary of your IRA allows for fixed payments to your non-spousal beneficiaries (i.e., children or grandchildren) over a longer span of time.
How It Works
1. Your estate plan specifies the gift vehicle, income beneficiaries, charitable remainder beneficiaries and amount of your IRA to fund the vehicle upon your passing.
2. With a Charitable Gift Annuity your chosen income beneficiaries will receive income for life. Or, with a Charitable Remainder Trust your beneficiaries will receive income for life or a term of years.
3. At the end of the life/lives/term, the remainder passes to your chosen charity.
· Your non-spousal beneficiaries do not have to take the entire distribution from your IRA within ten years. This could help your beneficiaries from being pushed into a higher income tax bracket with a very large tax bill.
· You can protect your IRA from beneficiaries who might deplete the account quickly by specifying the term they receive fixed payments.
If you have any questions about Testamentary Charitable Gift Annuities or Testamentary Charitable Remainder Trusts, please contact us. We would be happy to assist you and answer your questions.