If you are reading this article, you probably are interested in supporting Farm Sanctuary’s mission to protect farm animals from cruelty, inspire change in the way society views and treats farm animals, and promote compassionate vegan living. But like most people you also want to be sure your family is taken care of.
There are ways to provide for your family, make a gift to Farm Sanctuary and save taxes at the same time! You’ve worked hard to be successful and save for yourself and your family. Nonetheless, retirement assets in either workplace plans such as 401(k)s and traditional IRAs carry a heavy tax burden when passing these valuable investments to family.
The tax advantages of making charitable gifts of retirement assets are significant. If left to your family, these assets are subject to income taxes, and federal and state (if applicable) estate taxes. When given to a charity such as Farm Sanctuary, there are no income or estate taxes and there is an unlimited estate tax charitable deduction.
Consider a Gift of Your Retirement Assets
You can make such a gift by designating Farm Sanctuary as a beneficiary of your IRA, 401(k), SEP, 403(b), or other retirement plans. This “beneficiary designation” is one of the most family friendly and simplest ways to make a gift to Farm Sanctuary.
If you are subject to maximum taxation, the combined taxes on your IRA and similar assets can be nearly 80%, leaving your family with only about 20% of the original value. If you leave these investments to Farm Sanctuary 100% of your gift is free from income and estate taxes.
A gift to heirs of securities, real estate and other non-retirement assets are not subject to the same tax burden applicable to retirement plans. These non-retirement assets make great gifts to family and others that you care about. That means retirement assets are a tax-smart way to make a gift to Farm Sanctuary.
Everyone Can Win
Keep in mind that you don’t need to make Farm Sanctuary the sole beneficiary of these retirement accounts. For example, you could make your family a 75% beneficiary of your IRA and Farm Sanctuary as a 25% beneficiary. The portion of your IRA to charity will still enjoy the important tax benefits described above. What’s more, you can make Farm Sanctuary a contingent beneficiary. For example, you could specify your IRA would only go to Farm Sanctuary if your spouse (or children, or other heirs) died before you.
How Do I Make Such a Gift?
The kinds of plans to consider for the types of gifts we are talking about include IRAs (regardless of the type of IRA) and most qualified retirement plans, such as 401(k) and 403(b) plans. All you need to do is to request a Beneficiary Designation Form from your plan administrator and designate Farm Sanctuary as a beneficiary of either a percentage of your plan balance, a specific dollar amount, or subject to a contingency that you control.
