If you will have money left over in your individual retirement account
when you pass, then it’s up to you to decide who is to receive those
funds after your death. Can you leave your IRA to your church? The short
answer is yes, and by taking this route, both your estate and your heirs
may enjoy some tax advantages.
IRAs Pass Outside of Probate
Since IRAs pass directly to the named beneficiaries, they are not subject
to probate. This means that instead of listing the IRA as an asset in
your will, you name a beneficiary through the financial institution that
oversees your IRA.
Once you name a beneficiary, you can change beneficiaries at any time providing
you complete the forms required by your financial institution. If the
beneficiary that you named dies, or if you wish to leave the money to
your church, you can fill out the required forms listing your church as
the beneficiary of the IRA when you die.
Leaving an IRA to Multiple Beneficiaries
If you want to leave some, but not all of the money in your IRA to your
church, this is
possible. Naming your church as a beneficiary doesn’t have to be an all-or-nothing
decision on your part. You have every right to leave your IRA to one,
or even several beneficiaries, including your church.
You simply designate the percentage of the IRA that you wish for each beneficiary
to receive. For example, if you want the money in your IRA to your daughter
and her son, you can request that your daughter and grandson each receive
40 percent and your church receives 20 percent.
Keep in mind that bequests to charities reduce the size of your estate,
which in turn lowers estate tax bills (where applicable). Since most religious
organizations qualify as charities, leaving an IRA to your church can
reduce estate taxes.
Would you like to learn more about leaving an IRA to your church? If so,
scroll through our directory to find an estate planning attorney who can
answer all of your questions!