Can directing a portion of retirement assets to charity at death also help save taxes?
A. Yes. Funds remaining in your retirement accounts at death are considered part of your estate for federal tax purposes and could be subject to estate taxes. Additionally, any retirement funds that remain after estate taxes will also be subject to income taxes. Many well-advised people choose to avoid this “double taxation” by funding charitable gifts from their estate with excess retirement funds. Designating that charitable gifts be made with retirement funds and leaving other assets to loved ones ensures that no estate or income tax will ever be due on any balance remaining in retirement accounts.
