Can a Church Be a Beneficiary of an IRA?

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!