IF YOU DECIDE to make a charitable donation upon your death, you won’t get an income tax deduction, which you could receive if you made the gift during your lifetime. You will, however, shrink the size of your taxable estate.
You could simply name a charity in your will to receive some portion of your estate. But here’s an intriguing possibility: Donate your traditional IRA. As mentioned earlier in this chapter, beneficiaries (other than a spouse) of a traditional or Roth IRA typically have to draw down the account over 10 years. Those who inherit traditional IRAs will have to pay income taxes on the taxable portion of the withdrawal.
What if you want to spare your beneficiaries that tax bill? You might name a charity as beneficiary of your traditional IRA, while bequeathing your Roth IRA and other assets to your children or other family members. By giving your traditional IRA to charity, you’ll shrink your taxable estate and get rid of the IRA’s embedded income tax bill.
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