Assets in qualified (tax-deferred) retirement plans may represent a large portion of your total assets and therefore may be an important factor in a comprehensive planned giving strategy. Retirement assets generally considered suitable for planned charitable gifts include IRAs, Keoghs, SEPs, 401(k)s, 403(b)s, and ESOPs.
Left to family members or friends, these assets are subject to income tax and may also be subject to estate tax and generation skipping transfer tax. Because of this potential double layer of tax, retirement plan assets may be particularly attractive as an asset to leave to the Museum, because the Museum is exempt from income tax and bequests to it are deductible for estate and generation skipping transfer tax purposes. In other words, if you designate the Museum as a beneficiary upon your death of all or a specified percentage of a retirement plan, the portion of the plan payable to the Museum will generally pass free of any tax (income or estate), even though the same asset passing to individuals might be taxable in multiple ways. Retirement plan assets, in short, are a very efficient way to benefit the Museum. As a general rule, if you intend to make both noncharitable and charitable gifts at death, it makes sense to consider using your tax-deferred retirement plan assets for charity and other assets for heirs.
Supporters who are over the age of 70 and a half may also use their IRA to make qualified charitable contributions during their lifetime. This is a philanthropic alternative that individuals with IRAs may consider in order to enjoy seeing their gifts put to use during their lifetimes. For more information, visit moma.org/support/donate/faq.
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