Cleveland Bar Journal | I like simple things… like leaving a charitable legacy with an IRA!

Read the full post in the December 2020 issue of the Cleveland Metropolitan Bar Journal.

For many of our clients, retirement assets represent a major portion of their accumulated wealth. I am certain you have read articles which discuss how Qualified Charitable Distributions (QCDs) provide a very tax efficient method for persons over 70-1/2 to benefit a chosen charity during life. A QCD is a direct transfer of funds from an IRA payable to a qualified charity. These distributions count towards satisfying annual required minimum distributions. However, using IRAs as a simple and tax efficient way to make charitable bequests at death is another simple option for charitable distributions. Though traditional IRAs are highlighted, these alternatives are generally true of 401(K)s and other qualified retirement plans.

There are several ways to make charitable gifts that take effect at death and generate substantial income and/or estate tax benefits. Some of these methods are more complicated than others and require sophisticated trusts prepared by an estate planning attorney. However, these trusts may incur annual administrative costs and require annual tax returns in order to reap the benefits. Sometimes there is a simple, cost-free alternative
to accomplish a substantially similar result. I LIKE SIMPLE THINGS … LIKE LEAVING A CHARITABLE LEGACY WITH AN IRA!

Making Wise Choices

If a client wants to leave most assets to family members at death while also supporting a charity of choice, it makes good sense to leave nonretirement assets to family and retirement assets to charity. This is true because family members will pay income tax on distributions received from the retirement assets while a charity does not. As a result, 100% of the retirement assets received by the charity further its mission without reduction by income taxes. Smart planning with IRAs can make a big difference to charities and our clients and their families. [Read more…]

Read the full post in the December 2020 issue of the Cleveland Metropolitan Bar Journal.

Ronald F. Wayne, Esq., is Partner and Trusts & Estates Practice Group Leader at Buckingham, Doolittle & Burroughs, LLC in Northeast Ohio. Ron focuses on estate planning, probate, and elder law. He assists clients with the efficient transfer of wealth from generation to generation, business succession plans, and probate and trust litigation matters.

About Buckingham, Doolittle & Burroughs:

Buckingham is a corporate law firm that counsels Middle Market executives and business leaders all over Ohio and beyond. With offices in Akron, Canton and Cleveland, Buckingham offers clients Business Law Reimagined through sophisticated and practical legal services. Serving the region for over 100 years, Buckingham’s mission is to deliver meaningful experiences through the practice of law, exceed expectations in terms of service, counsel and business sense, and to offer continuous value to the industries, communities and clients they serve. See all of our news and updates by visiting our website.