Retirement Assets

Retirement plan assets are good sources of retirement income but not always a good choice for making gifts to children or grandchildren.  These assets are typically subject to tax on two levels.  The assets can be subject to estate taxes in your estate, and upon receipt of the assets by a child or grandchild, they generally must report distributions from your retirement accounts as taxable income.  Upon receipt of these assets by a child or grandchild, they are subject to income tax at federal rates up to 35% in addition to applicable state taxes. 

If, instead, you name Central Virginia Food Bank as the beneficiary of your retirement plan assets after the death of you or your spouse, 100% of the plan's balance would be available for the Food Bank's use, since the distribution would avoid both income and estate taxes.  Or, you could include the Food Bank as the beneficiary of a portion of the assets.  After consulting with your legal or financial advisor, you should then contact your plan administrator for a Change of Beneficiary form to include the Food Bank as a beneficiary.

New Opportunities for Donors Age 70 1/2

Recently, a new law was enacted which gives certain individuals the ability to make charitable gifts from their IRAs free of tax.  Prior to this law, you were required to report any amount taken from your IRA as taxable income, and then take a charitable deduction for the gift, but the charitable deduction was limited. Between now and December 31, 2007, the “Pension Protection Act of 2006” gives you the unprecedented opportunity to help Central Virginia Food Bank by making IRA gifts simply and without tax complications. 

You may make a gift from your IRA if:

• You are 70 ½ or older
• The gifts do not total more than $100,000 per year
• You make the gift on or before December 31, 2007
• You transfer funds directly from an IRA to Central Virginia Food Bank
• You make the gift to the Food Bank’s campaign to build the CVFB/Meals on Wheels Community Kitchen, the Food Bank’s Endowment, or some other fund for which you or your representative have no advisory rights. 

To understand how the Pension Protection Act works, click here for some Questions & Answers which might help you determine if this type of gift is right for you.

Return to Planned Giving Page

For additional information about planned gifts, please contact Tami Messenger at the Central Virginia Food Bank office.  All conversations will, of course, be confidential.

Telephone 804-521-3275 •  Email:  tmessenger@cvfb.org

 

The Planned Giving discussion on this website is not intended to be legal or financial advice.  Please consult your attorney or financial advisor to determine whether any of these planning ideas are applicable to your own situation.