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Estate Planning Tools Planned Giving E-newsletter Heritage Club About Us GIVING - MOVING FORWARD What Planned Giving Can Do
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SMART CHARITABLE GIVING FOR THOSE 70½ OR Older

Tax-Wise & Medicare-Wise Charitable Giving Today

January 2021 Update - During 2020, the CARES Act created a holiday for required minimum distributions from IRAs. The CARES Act holiday for required minimum distributions from IRAs was NOT extended into 2021. In 2021, IRA owners age 72 and older will resume their required minimum distribution (RMD) from IRAs.

USING YOUR IRA TO MAKE A
CURRENT CHARITABLE GIFT

The law remains that IRA owners age 70½ and older can make a charitable rollover gift of up to $100,000 from their IRA to public charities, this charitable IRA rollover will count toward their RMDs.

May satisfy your annual required minimum distribution (RMD) up to the amount of the gift
Reduce your taxable income, even if you do not itemize deductions, because it allows you to give from pre-tax assets and your distribution is excluded from taxable income
May prevent you from being pushed into a higher tax bracket or higher Medicare Part B or Part D premium bracket because the gift reduces your taxable income.
Helps avoid limits on charitable deductions
Minimizes the effect your giving has on your cash flow because the gift is from your assets (your IRA), not your check book

If you are at least 70 1/2, you can make annual charitable gifts through your IRA. At your direction, your IRA custodian will transfer the gift you designate directly from your IRA to a qualified charity. This is known as a Qualified Charitable Distribution, or QCD.

How to make a current charitable gift
through your IRA

  1. Contact your IRA plan administrator to make a gift from your IRA to United Way of Santa Barbara County.
  2. Your IRA funds will be directly transferred to United Way of Santa Barbara County to help continue our important work.
  3. Please note that IRA charitable rollover gifts do not qualify for a charitable deduction, but will reduce your taxable income.
  4. Please contact us if you wish for your gift to be used for a specific purpose.
  5. Each IRA company has instructions for making a QCD. If you need help getting QCD directions for your IRA company or we can help in any other way, please contact us.

USING YOUR IRA TO MAKE A
FUTURE LEGACY CHARITABLE GIFT

IRA Beneficiary Designation Gifts are Simple, Tax-Smart & Affordable. If you are interested in making a planned gift to United Way, but are also concerned about your current and future needs, know that IRA beneficiary designation gifts are simple, tax-smart and flexible. Talk to your financial advisor about funding legacy gifts with your traditional IRA, which is a taxable asset except when gifted to charity, while leaving other non-taxable assets to heirs.

How an IRA beneficiary designation gift works:
  1. Contact the person who helps you with your account.
  2. Ask them to send you a beneficiary designation form or show you where to find this on-line.
  3. Complete the form, sign it, make a copy for yourself and mail in the original.
  4. When you pass away, your IRA will be distributed consistent with the beneficiary designation.

Your IRA company will not be influenced by what your will or trust says, what your spouse or kids say, or what your trustee says. The most recent IRA beneficiary designation form signed and submitted determines who will inherit your IRA, so it is very important to make sure this designation is up-to-date.

Even after you complete the beneficiary designation form, you can take distributions from your IRA. You can also change your mind at any time in the future for any reason, including if you have a loved one who needs your financial help.

Most beneficiary designation forms are very flexible. You can name United Way of Santa Barbara County (UWSBC) as a "full" or "partial" beneficiary of your IRA. You can also name UWSBC as a "primary" or "contingent" beneficiary. Please make sure your IRA designation is current and consider a legacy gift to United Way through your IRA.

If you need help getting directions on naming beneficiaries from your IRA company or we can help in any other way, please contact us.

DONOR ADVISED FUNDS

Many people have Donor Advised Fund (DAF)s which allow them to donate assets for charity today – and receive a tax deduction now – even though the actual funds are not granted by the donor to the final charity until some point in the future. DAFs can be used to make current gifts and future gifts.

Learn more making a gift to United Way of Santa Barbara County through your existing DAF.

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