Charitable giving through IRAs is rising.
Are you over age 70½?
Do you have a non-employer retirement account, an IRA?
Are you strongly considering making charitable gifts through your IRA?
If yes, you are in good company.
According to a recent ThinkAdvisor article titled “Charitable Gifts From IRAs Shot Up by 74% in 2018,” a FreeWill survey of 120 nonprofits found Qualified Charitable Distributions to these nonprofits increased by 73.8 percent last year.
Not only are more people giving, but the gift amounts have seen an increase.
A little over half of the nonprofits surveyed noted an increase in average gift amounts.
Only 12 percent reported a decrease.
What are the reasons for this trend?
One speculation is demographic changes with the 70 to 80 age bracket quickly growing.
Another is tax changes.
New tax laws make IRA charitable distributions appealing for those older than age 70 ½.
The itemized deductions and charitable deductions will not apply due to the increased personal exemption, making the IRA distribution appealing for its tax benefits.
It can also satisfy the required minimum distribution imposed by the IRS.
Sounds like a great win-win option, right?
Why then might some people not choose to make Qualified Charitable Distributions?
For most charitably-minded people it is oftentimes just a lack of understanding.
The process can be confusing.
Some people may not even know it is an option.
How do you solve for this?
Take time to discuss this option with your estate planning attorney, financial advisor, and IRA custodian.
Once you have the answers, you will be able to move forward with confidence.
Reference: ThinkAdvisor (May 6, 2019) “Charitable Gifts From IRAs Shot Up by 74% in 2018”