Retirement Plans

Avoid a 70% Tax Rate

Many Americans have IRAs or 401(k) plans that have greatly appreciated in value. Should you not live to realize all of that account, it makes sense to consider naming a charity to receive some of the asset.

Here's why: Contributions to some retirement plans are sheltered from income tax. However, your heirs are left out of this shelter when they inherit a plan's income. This tax exposure is called "income with respect to a decedent" (IRD) and can run as high as 70% of the payments received.

Contact your tax advisor to asses how vulnerable your heirs may be to this burden; and consider making your charitable bequests from IRD assets.

Find out more: Contact Michele Brannigan, Senior Gift Officer, at 401-444-4639 or mbrannigan@lifespan.org, or Eric Archer, Planned Giving Specialist,  at 401-423-0083 or PGInfo@lifespan.org.