Gifts of pensions or IRAs are perhaps the most powerful charitable tax savings tools available. Retirement plans and IRAs may be subject to joint income and estate taxes of up to 80 percent, after your life and the life of your spouse. If your professional adviser believes this is your situation, an appealing alternative to paying this tax from your estate may be naming Yeshiva University as beneficiary of your pension. In this way, 100 percent of your pension goes to help Yeshiva university, rather than up to 80 percent going to the IRS and only 20 percent going to your children. This option is particularly attractive if you have other resources to leave your children.
If you wish to conserve your pension or IRA for your children, there are ways to reduce income and estate taxes on these assets, while increasing the monies available both to your family and Yeshiva University.
For example, consider naming us as beneficiary of your pension, while using your pension income to purchase relatively low cost insurance for your children. If done with advice from your professional adviser, this could result in leaving 100 percent of your pension to Yeshiva University, and an amount equal to 100 percent of your pension to your children; instead of leaving 20 percent to children and paying 80 percent to the IRS in estate taxes.
Remember that by giving low tax assets to children, and high tax assets to charity, you help them both.