Assets in qualified retirement plans may represent a large portion of your total assets and be an important factor in planning testamentary gifts.
Assets in qualified (tax-deferred) retirement plans may represent a large portion of your total assets and therefore may be an important factor in planning testamentary charitable gifts. Retirement assets generally considered suitable for charitable gifts include such plans as 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 MoMA. 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 escape estate taxes, and MoMA, as a tax-exempt institution, will not be required to pay income tax on the distributions. 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. If you are thinking about donating retirement plan assets to the Museum, you should discuss the matter with your advisors beforehand.
Contact the Office of Planned Giving at email@example.com or (212) 708-9675 for further information.