Michael and Kelly were retired engineers with two adult children. They owned a home, some stocks, and IRAs. They met with their financial advisor to discuss a plan to provide for their family and for some of their favorite charities.
Kelly: We both had a lot of money in our IRAs, which was more than we could ever use. We wondered if we could pass this on to our children.
Michael: Our advisor explained the problem with giving our retirement savings to our family. He said a majority of the gift would be taxed. We didn't want our children paying any more in taxes than they already pay.
To alleviate their concerns, Michael and Kelly's advisor created a plan that stipulated their stocks and home go to the children. He then recommended a bequest of the retirement assets be left to their favorite charities. These charitable organizations could then receive all the assets from Michael and Kelly's IRAs tax-free, allowing them to use the funds to further their missions.
Michael: It was easy to make bequests from our IRAs to our favorite charities. We filled out the online forms on our custodian's website that permitted us to allocate percentage shares to charitable causes.
Kelly: This plan met all of our goals. We liked the fact that our children could immediately sell the house and stocks with little or no tax due. We were also happy to help some worthy organizations continue their good work.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization.
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