Recorded - February 17, 2016
Experts estimate that Americans hold some $3 trillion dollars in traditional Individual Retirement Accounts. Donors with children and an IRA who are also committed to making a significant gift to charity at death are usually receptive to a suggestion to combine the gifts to children and charity by giving all or a portion of the IRA to a charitable remainder unitrust ("CRUT"). Both charity and the children can do better with a larger combined gift than with an actuarially comparable gift of a portion of the IRA directly to charity.
The technique is rarely explained to the vastly larger class of potential planned giving donors whose charitable objectives, though real, fall a distant second to providing for their children. Even for donors who had not considered making a significant charitable gift at death, leaving IRA assets to a CRUT might actually provide more for their kids than passing the IRA to them directly, and still yield a large benefit to their favorite charity. This technique could open the way for many more significant charitable gifts.
This webinar explores reasons why bequeathing a traditional IRA to a CRUT might make sense to both classes of potential donors. Although the bumper sticker explanation is not complicated - capital gains tax rates eventually apply to distributions from a CRUT while ordinary income tax rates apply to all distributions from a traditional IRA - this webinar not only unpacks this explanation in some detail, it also reviews other advantages to a CRUT. It will also consider the most common objection to this technique - the risk of a premature death - and how to properly evaluate it in a planning context.
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