Planning for Life

Making Charitable Contributions from Your IRA

Posted by Harry S. Margolis on June 14, 2017

By Harry S. Margolis

I've often heard that taxpayers should make their charitable contributions from their IRAs rather than from their other savings, but didn't understand why until recently. It seemed to me that any tax incurred by withdrawing funds from the IRA would be offset by the charitable deduction available for making the gift. So the result would be the same whether the taxpayer withdrew the funds from the IRA and subsequently made a charitable gift of the same amount or made the donation directly from the IRA.

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Topics: Retirement Benefits, Retirement Planning

Special Needs Trusts and Retirement Benefits: A Complicated Subject

Posted by Anthony Bushu on May 5, 2017

By Karen Mariscal 

older parent and child.jpgMuch of your savings may be in your 401(k)’s and IRAs.  It is important to designate the proper beneficiaries for these accounts, so that your beneficiaries do not have to pay taxes on the funds prematurely. Unfortunately when a beneficiary has special needs, it gets complicated.

If the beneficiary receives the IRAs and 401(k)’s directly, the required minimum distributions (RMDs) could prevent your child from receiving the government benefits he needs. But if you designate a special needs trust as the beneficiary of a retirement account, there could be adverse income tax consequences. 

Fortunately, with proper drafting, such tax results usually can be prevented. People have written entire books on this subject -- this is our attempt to summarize the basic issues.           

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Topics: Special Needs Trust, Retirement Planning, Retirement Benefits, Required Minimum Distributions

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