Life and Death Planning for Retirement Benefits

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7.7 Putting it All Together

Here are planning principles that emerge from the discussion in this Chapter:

If a client wants to make charitable gifts as part of his estate plan, consider using retirement

benefits as a tax-efficient way to fund such gifts.

B).

If part of the client’s IRA is to be paid to individuals and part to charity, and use of the life

expectancy payout is an important goal for the individual beneficiaries, consider

establishing separate IRAs, one payable to the charity and one to the individuals.

C).

If benefits are left to a trust with individual and charitable beneficiaries, determine which

is more important, the life expectancy payout or the charitable gift. It may be necessary to

sacrifice one goal to achieve the other, or establish separate trusts to achieve both

If benefits are to be left to a charity through a noncharitable trust or an estate, take care,

both at the drafting and the administrative stages, to assure that the trust or estate does not

become liable for income taxes on the benefits intended to go to the charity.

Consider leaving retirement benefits to a public charity, a private foundation, a charitable

remainder trust, a gift annuity, or a donor-advised fund; generally do not name a charitable

lead trust or pooled income fund as beneficiary of a retirement plan.

Consider lifetime gifts to charity using NUA or ESOP stock, required distributions, or a

series of substantially equal payments; if over 70½, use Qualified Charitable Distributions

(in years when QCDs are permitted) to satisfy all or part of your IRA minimum

distributions.