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Many individuals today have large qualified retirement plans,
such as an IRA, 401(k), or Keogh plan. These assets have
been growing tax-free for years. Once the owner begins to
receive payments from the qualified plans, the distributions are
taxed. The plans are also included in the owner's
taxable estate. A retirement plan may be an excellent
source of funds for making a gift to the American Red Cross.
One way to make a gift of your
retirement plan is to create a charitable remainder trust
through your will. It works like this: Your IRA assets
will be transferred to a charitable remainder trust. There
is no tax due because the charitable remainder trust is a
tax-exempt entity. The trust will provide life income to
the beneficiary (for example, your child) with an eventual gift
to the Red Cross. The beneficiary will pay income tax on
the distributions from the trust. Your estate will receive
an estate tax charitable deduction for the value of the Red
Cross's right to eventually receive the trust assets.
If you are interested in learning more about gifts of retirement
plan assets, please
contact
Elaine
Hansen here at the Red Cross at
mowerarc@charter.net
or by
telephone
at (507) 437-4589..
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