Giving From Your Retirement Plan: The Details

If the largest asset in your estate is your retirement plan, such as a 401(k), IRA, or Keogh, you may be surprised to learn that the IRS will impose income tax on the remaining balance in the account if you designate it to any other beneficiary, including your spouse.

This tax is in addition to the estate tax that may be imposed on the account. For estates fully subject to the estate tax, the result can be that up to 60 percent of the value of your retirement plan will be consumed in taxes before your child, relative, or friend receives it.

There is a sensible charitable alternative

Name your favorite Valley charity as the beneficiary of your retirement plan, then use other assets not subject to income tax to make gifts to your heirs. Your favorite Valley charity, as a qualified non-profit, won't pay income tax on our distribution and your heirs will receive their share of your estate without the burden of extra taxes.

Read more about how to designate us as a beneficiary of a retirement plan.