Addressing Taxing Problems

Do you have money saved in an employee retirement plan, IRA, or tax-sheltered annuity? If you do, you know that these plans contain income that is subject to taxes? When a distribution is made from your retirement plan account, you or your beneficiaries will owe federal income tax unless you plan wisely.

Consider leaving your loved ones and the Saint Michael and All Angels Foundation your less heavily taxed retirement plan assets. The Foundation is tax-exempt and will receive the full amount of what you designate from your plan.

There are several ways to take advantage of these tax-saving opportunities:

All you need to do is contact your plan administrator and update your beneficiary designation form. You can designate the Foundation as the primary beneficiary for a percentage of the plan or for a specific amount. You can also make the Foundation the contingent beneficiary so that it receives the plan balance only if your primary beneficiary does not survive you.

If you are 70 ½ years old or older, you can support the legacy of Saint Michael and All Angels and receive tax benefits in return. You can give up to $100,000 from your IRA directly to the Foundation without having to pay income taxes on the money.

When you fund a charitable remainder trust with your retirement plan assets, the trust receives the proceeds of your plan upon your death, not the government. The trust typically pays income to one or more named beneficiaries for life or for a set term of up to 20 years, after which the remaining assets would come to the Foundation. This provides excellent tax and income benefits for you while supporting your family and ultimately the mission and ministries of Saint Michael and All Angels.

When retirement plan assets pass to your heirs, distributions are taxed as ordinary income, reducing the amount available to them. However, you can designate your Donor Advised Fund as the beneficiary of all or a portion of your retirement plan assets, which receives the full amount of your gift and bypasses any federal taxes.

Whatever your plan, there are many options available to you. Consult with your financial advisor or attorney on what is best for you and your family. And, remember to include the Saint Michael and All Angels Foundation in your estate plan, perpetuating the legacy of love, compassion, and service for which Saint Michael is known.

To discuss including Saint Michael in your will or other planned giving options contact Lowell Duncan, Director of Legacy Planning: lduncan@saintmichael.org.