Estates often include retirement assets such as IRAs, annuities, and pension plans, that are taxable to the beneficiary. The beneficiary may owe both income tax and estate tax without an income tax deduction. By making a non-profit organization the sole or partial beneficiary of one’s retirement assets, the amount you leave to the non-profit is free from income tax. If your estate is large enough, it is also free from an estate tax, AND you leave a legacy behind. This can be accomplished by simply changing the beneficiary statement on the retirement accounts to name the American Harp Society Foundation as sole or partial beneficiary of the accounts.
There are many tax benefits to including a non-profit organization in one’s estate planning. Federal estate tax rates and corresponding estate values change each year. For example, in 2006, a federal estate tax was imposed on estates valued at more than $2,000,000. The value of an estate in excess of $2,000,000 was taxed at a rate of 46%. Most states, like Oregon, have an inheritance tax. Oregon's exemption is $1,000,000. By naming a non-profit as a beneficiary of the estate, that bequest would reduce the total value of the estate, thereby lowering the net federal estate tax, any state inheritance tax, and income taxes. Charitable contributions made in this way may reduce all estate tax obligations while leaving a legacy behind. The best assets you may have to give to your favorite charity are the IRAs, annuities, and pensions because of all the taxes levied on them if left to family members or friends.
The American Harp Society Foundation welcomes bequests and can name future awards in behalf of the donor. Take an opportunity to leave your legacy.
For questions contact Alice Spero Keene at: firstname.lastname@example.org.