By Brenda Rigdon
Recently I worked with a donor couple who want to leave a legacy by creating annual streams of income for four charitable organizations that have helped their family over the years.
Yes, they do have children, but they have taken care of an inheritance for their daughters by purchasing life insurance policies with their daughters as beneficiaries. Life insurance proceeds are not taxed, so the entire amount of the policy will go to their daughters.
What are they using to set up their legacy at the Community Foundation? The money in their IRAs. Why?
Because various state and federal taxes reduce the amount from your IRA that is available for your heirs by as much as 50% to 75%, which means that only 50 cents or 25 cents per dollar will go to your kids or grandkids. But ALL of the proceeds from an IRA can be gifted to charity.
What these donors are doing is brilliant. They can leave a nice nest egg to their daughters AND support the charities they love AND avoid paying taxes to the government.
How about you? What will your legacy in our community be after you are gone?
The Community Foundation is the solution, regardless of the causes that matter most to you. Really. I’d love to talk with you more about your charitable dreams. Call me at 574-267-1901. Or learn more about how you can leave a legacy at http://kcfoundation.org/share/
The information is this article should not be considered legal or tax advice. Please consult with your legal or financial advisor about the type of charitable gift that makes the most sense for you.