Scott Thomas, ChFC®, CAP®, CKA®, RICP®

Naming Charity as Beneficiary On IRA

In general, naming a charity as the primary beneficiary will not affect required distributions to you during your lifetime. However, after your death, having a charity named with other beneficiaries on the same asset could affect the tax-deferral possibilities of the noncharitable beneficiaries, depending on how soon after your death the charity receives its share of the benefits.

One possible solution is to carve out the amount or percentage of the IRA to a separated account number and name 100% of that portion to charity.

Another potential solution if you wanted to accomplish Required Minimum Distribution aka RMD and do it in a tax neutral way, then making Qualified Charitable Distribution directly to charity from IRA may be your best choice. Some IRA account have limits on amounts and how many transactions to charity. Hear this clearly that such limits are NOT Federal limits rather custodian or company limits.

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