Disposition of Retirement Assets Post SECURE Act

With a bit of additional planning, your charitably inclined clients may avoid realizing deferred income tax. Inheritances from IRAs and 401(k) or 403(b) plans can be subject to both income and estate taxes, but there are other options. Naming a St. Louis Community Foundation charitable fund as a beneficiary of a retirement plan account is a very tax-efficient method for your client to support their philanthropic legacy, perhaps enabling them to dedicate more tax efficient assets to be inherited by their heirs. Doing so may allow your client’s heirs to inherit assets free of income taxes while also reducing the size of their estate, thereby potentially avoiding estate taxes.

Legacy Advised Funds are a particularly strategic recipient of an IRA. Donors establish the fund during their lifetime and designate family/friends to make grants in the future. STLCF can work with donors and their family to explore their values and interests to ensure they are reflected in their philanthropic legacy. Advisor(s) selected by donors may recommend grants locally, nationally, or internationally to any nonprofit that is a registered 501(c)(3). Learn more about legacy advised funds here.

Have questions about naming a charitable fund at STLCF? Contact Katie Knapp at kknapp@stlgives.org