Situation:
Would like to leave entirety of traditional IRA to Fidelity Charitable (DAF) upon death of account owner.
We are getting mixed answers on details regarding estate valuation for (potential) estate tax purposes, and would like to sanity check.
For the transaction, does it:
A) Count as a full withdrawal of the IRA, and then a matching charitable deduction for the contribution to the DAF, ie. it is added to the estate value then deducted as charitable contribution?
B) Pass directly to the DAF, and neither count in the estate value nor qualify for a charitable deduction?
My research says A, but being paranoid because of lawyer statements.*
Bonus question: On the presumption that at least the value of the IRA is going to be donated to charity, is there any reason NOT to leave the IRA to the DAF, vs. something like leaving it to a new see through trust that benefits the beneficiaries? Note that all beneficiaries will pay income taxes over the 10 year withdrawal.
My feeling is creating a new trust is unnecessary expense and paperwork.
*One citation: https://www.fidelitycharitable.org/guid ... r%20choice.
"Your estate will need to include the value of the assets as part of the gross estate but will receive a tax deduction for the charitable contribution, which can be used to offset the estate taxes."
Much appreciated,
Scott
Would like to leave entirety of traditional IRA to Fidelity Charitable (DAF) upon death of account owner.
We are getting mixed answers on details regarding estate valuation for (potential) estate tax purposes, and would like to sanity check.
For the transaction, does it:
A) Count as a full withdrawal of the IRA, and then a matching charitable deduction for the contribution to the DAF, ie. it is added to the estate value then deducted as charitable contribution?
B) Pass directly to the DAF, and neither count in the estate value nor qualify for a charitable deduction?
My research says A, but being paranoid because of lawyer statements.*
Bonus question: On the presumption that at least the value of the IRA is going to be donated to charity, is there any reason NOT to leave the IRA to the DAF, vs. something like leaving it to a new see through trust that benefits the beneficiaries? Note that all beneficiaries will pay income taxes over the 10 year withdrawal.
My feeling is creating a new trust is unnecessary expense and paperwork.
*One citation: https://www.fidelitycharitable.org/guid ... r%20choice.
"Your estate will need to include the value of the assets as part of the gross estate but will receive a tax deduction for the charitable contribution, which can be used to offset the estate taxes."
Much appreciated,
Scott
Statistics: Posted by Scotttheking — Wed Feb 28, 2024 8:51 pm — Replies 2 — Views 314