Most people look to their will or living trust to convey a meaningful charitable gift. But the truth is your qualified retirement account, such as an IRA or 401(k), can be every bit as powerful as a bequest.
While you can roll over an IRA or 401(k) plan to your surviving spouse without them incurring onerous taxes, non-spousal beneficiaries of a qualified retirement account (such as a child) are required to pay income taxes in addition to state and federal estate taxes. This double taxation can decimate the account of up to 75% of its value.
If you are 70 ½, you can elect to transfer up to $100,000 a year out of your IRA to PLF. The transfer must be made directly to PLF from your IRA custodian. The amount transferred counts toward your required minimum distribution (RMD).
To make the transfer, contact your IRA custodian and tell them you would like to make a “Qualified Charitable Distribution (QCD)” to Pacific Legal Foundation, 930 G Street, Sacramento, CA 95814.
PLF’s tax id number is: 94-2197343.