Leaving a Charitable Bequest through a Retirement Account

If you are thinking of leaving a gift to a charity at your death, you might consider designating the charity as a beneficiary on certain types of retirement accounts. Unlike an individual who is named as a beneficiary, a charity will not have to pay income taxes on the gift. Additionally, while an individual may receive a step-up in basis on many testamentary gifts, he/she will not get a step-up in basis when named as a beneficiary on a retirement account. If you were considering making a charitable gift at your death, it might be better to leave all or part of your retirement account, and leave a different asset to your loved ones so that the individuals who inherit from your estate may be put in a better position with regard to taxes, and thereby enjoy more of the gift. Your estate will be able to claim a charitable deduction and the gift may even save estate taxes. These are just a few of the benefits in making such a designation, not to mention the feeling you get when you give to help a charity.


  1. An interesting article – and something to keep in mind. Thanks.

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