Retirement plan assets, such as IRAs, can make excellent charitable gifts with significant tax savings.

Qualified retirement plans enjoy favorable tax treatment prior to retirement but are severely taxed at the death of the plan's participant. Qualified plans may be subject to income tax, estate tax, and an excess accumulation tax, which can total 80 percent or more.

In many cases, it may be advantageous to name the Ann Arbor Area Community Foundation as the beneficiary of a retirement plan, and leave other assets to heirs. Estate tax and income tax can be avoided if the plan participant makes a beneficiary designation  for a charitable gift at his/her death. Unfortunately, excess accumulations tax, if applicable, cannot be avoided.

Congress is currently reviewing bills that would retroactively extend the IRA Charitable Rollover through December 31, 2010. The Charitable IRA legislation makes it possible for Americans age 70½ and older to transfer their retirement assets tax-free to a charitable organization during their lifetime.
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If you have questions regarding the gifting of retirement assets to the Community Foundation, please contact AAACF CFO Doug Weber

.