Tax-deferred retirement accounts, such as IRAs, 401Ks, Keogh plans, SEPs and tax-deferred annuities, allow invested funds to grow tax-free until they are withdrawn — usually to support the retired account holder and his or her spouse (if applicable). Through required minimum distributions, most tax-deferred accounts are designed to be completely used up by the time of death, based on average life expectancy.
In the event that death occurs before the funds have been depleted, retirement account assets pass to others according to the instructions given by the account holder to the account administrator in the most recent beneficiary designation form.
Typically the spouse (if applicable) is the primary beneficiary, and he or she can use the retirement assets as taxable income throughout the remainder of his or her lifetime.
Any funds remaining in these accounts after the owner and spouse have both died make an excellent gift of resources for ministries such as GFA. Not only are such gifts fully deductible for estate tax purposes, but gifts from tax deferred assets also completely avoid the income tax that would otherwise be due if these funds were passed on to children or other non-charitable beneficiaries. When combined with the applicable estate tax, this "income in respect of a decedent" or "IRD" tax can amount to as much as 70 percent or more of the total asset value! Those with a heart for ministry may want to use these dollars to impact eternity, and avoid losing a substantial portion of them to the government in taxes.
By specifying GFA as a contingent beneficiary (after your spouse, if you are married) or as the primary beneficiary (if you are single) of some or all of each tax-deferred account you own, you can maximize the positive effect that any dollars left in these accounts can have after you are gone.
Gospel for Asia,
1116 St. Thomas Way
Wills Point, TX 75169
If you have any questions or wish to start the process for your gift, please fill out our contact form, or call GFA's Harvest Foundation at 800-946-2742.
All gifts are subject to Gospel for Asia's Gift Acceptance Policy.
DISCLAIMER: This web page is designed to provide information and illustration of the subject matters covered. It is not intended, nor should it be used as legal, accounting or other professional advice. It is always a good idea to seek legal and tax advice from your professional advisor(s).