Some assets carry heavier tax burdens than others and are therefore costly assets to leave to your family. Your Individual Retirement Account (IRA) and 401(k), for example, will be taxed twice if you leave them to your children because they will increase both your taxable estate and your children’s taxable income. If you leave these assets to your surviving spouse, they will be transferred outside of your taxable estate, but they will increase both your spouse’s taxable estate and his or her taxable income. Your IRA and 401(k) are prime assets to use as gifts to Young America’s Foundation in order to avoid double taxation and maximize the impact of your legacy.
You should review the beneficiaries you appointed when you completed paperwork to start your retirement account. The beneficiaries named on these forms will inherit these assets regardless of what your will stipulates. You must contact the companies that manage these accounts separately if you wish to change your beneficiaries to accommodate plans for your legacy. If you are married and want an organization or individual other than your spouse to benefit from your 401(k) or other company retirement plan, your spouse must sign a special waiver.
To make a gift from your retirement plan, please contact us and ask your plan administrator for a “Change of Beneficiary” form. You will need Young America’s Foundation’s tax identification number (23-7042029) and address (110 Elden Street, Herndon, Virginia 20170).
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