How to take care of your kids and still be a philanthropist
Al Jackson

If you are like a large number of Americans you were somewhat disgruntled to learn that at your death you will not be able to leave the considerable buildup in your qualified retirement plans (QRP) to your children without suffering a tax thrashing (up to 70% or more in taxes paid at death) or perhaps shoving a tax problem on down to another generation. To this point, the folks who managed the plans may have neglected to explain to you that the government never intended for IRAs, KEOGHs, or any other QRP to be a legacy. They were only intended to be a supplement to Social Security benefits or other pension plans.

For many of you, your qualified retirement plan (IRA) is by far your largest asset, and the one that will be most heavily taxed upon your death. The last 25 years of market activity have produced some IRA accounts that are way past your expectation, and in many cases way past your income needs and no taxes have been paid. You can use this asset to help your favorite charity or your church through a fund in the Community Foundation and solve all those tax problems.

You say "we wanted to leave 100% of it to our kids" We can work together to help you do that. Let's assume that you have $500,000 in a mix of QRPs (not at all unusual). Have your attorney draw up a testamentary CRT (Charitable Remainder Trust) Have the trust named as beneficiary of the plans. The money passes untaxed to the CRT. Over a ten year period, pay out 10% per year to your kids, or other heirs. At the end of the ten year period there will be approximately $180,225 (according to the IRS actuarial tables) left to go to a fund in the Carroll County Community Foundation to be used to benefit the county however you determine that should be done. It can help your favorite non-profit organization, or your church, or some general field such as youth, or scholarships, or any area that interests you. This fund can bear your name or honor someone of your choosing.

Pretty nifty. 10% x 10 years is 100%... a win for you and the heirs. Remember in a typical distribution they would only get about 30%. A win for Carroll County because you still get to be a substantial philanthropist locally with very minimal cost to you instead of letting the government decide how to spend it.

REMEMBER you will still be able to take money from the plan while you are alive, if you need to.

We are pretty sure that a strong majority of Carroll County folks would take this deal if it is explained to them. Just think of the resources that would be available to help make Carroll County a better place if we could work with just 100 families in this way. It is hard to imagine the good that can be done with that kind of resource.

Won't you work with us to be one of those 100 families? We'd be glad to talk with you and your attorney and accountant about this tremendous way that you can make a real difference in Carroll County at very little cost to you. For further information/discussion call the Carroll County Community Foundation at (800)964-0508.

Al Jackson is serves as president of the Carroll County Community Foundation.