You can donate retirement accounts, such as an IRA, by distributing the proceeds to charity. However, the tax benefits for donating this way are minimal. A tax-efficient donation strategy is to contribute your retirement fund directly to a charitable organization as part of your estate plan.

Options for Donating an IRA

The two primary options for charitable bequests with an IRA include:

Tax Consequences of a Lifetime IRA Donation

Benefits from a retirement plan, such as an IRA, are payable only to the account holder or employee who earned them. Some exceptions allow a spouse or survivor to reap the same benefits.

Non-Roth retirement plan distributions are income taxable for whoever receives the funds, except with charitable distributions through an estate plan. There are tax implications, whether the recipient is the account holder or their beneficiary.

IRA Donations upon Death

You can name a charity as the beneficiary of your IRA account. The benefits of this method include:

Designating a Charity as an IRA Beneficiary

Typically, designating a charity as the beneficiary of an IRA account is simple. Fill out the necessary form, and you’re done. Your plan administrator or employer should provide the form upon your request. If your IRA is through a bank or financial service, they can give you the beneficiary form or advise you of the appropriate language for naming a beneficiary on the account.

The account should pass to the charity upon your death without going through probate. That means they don’t have to wait for a probate judge to approve distribution. The funds should automatically transfer when you die.

Contact an Estate Planning Lawyer

You should seek assistance from an experienced estate planning lawyer. Donating retirement proceeds to charity is only beneficial if you correctly handle the account. Without the proper beneficiary form or language in your estate plan, your chosen organization might not receive the funds you leave behind.

Contact us immediately if you want to discuss how to set up an IRA charitable bequest. Let our team review your options and advise you about which can benefit you and your beneficiaries most.

Schedule a consultation today.


This article is a service of Miller & Miller Law Group. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.