Santa Barbara Maritime Museum Logbook

IRA Beneficiary– the easiest way to leave a legacy for the Museum

Many people have an IRA (Individual Retirement Account) that was rolled over from a former employer retirement account like a 401k or 403b.  Or, maybe you have an Inherited IRA that a relative or spouse left to you upon their passing.  As the owner of the IRA, you can name your own chosen beneficiaries of the IRA proceeds when you die.  Most people name their family members as the beneficiaries, yet all withdrawals (with one exception) from an IRA will be taxable to them.  If an IRA owner has charitable intent, the IRA is the most tax efficient way to gift to a charity.  It is easy to do, and no need to engage your estate planning attorney to update your trust.  You simply contact the company that holds and manages the IRA and ask them to send you a change of beneficiary form.  If you name a charity, or multiple charities, as a beneficiary/ies of an IRA, then the charity/ies receive the IRA proceeds upon your death, tax free!  Check with your financial and legal counsel as there may also be some estate tax deduction for this too.   Many people have sizable IRA accounts and may not want to leave 100% to a charity and have some family members in mind. Then, the easiest route to take is to open up a new IRA account, move or “roll over” whatever funds you want to eventually go to your charity, and name the charity as the beneficiary on that new IRA account.  Upon your death, that new IRA will go directly to the charity, while your other IRA goes to your chosen beneficiaries, such as your family.  IRAs are very flexible, and you can roll funds from one IRA to another (as long as they are like-titled; you can’t roll from a traditional IRA to an Inherited IRA and vice versa).  So, if you want to add funds to the IRA that will go to charity, you can move funds from the other IRA that may be going to family, or vice versa.

Planned giving information provided by SBMM and its volunteer-based Planned Giving Committee is educational in nature and the Museum cannot render any type of legal or tax advice. 

Learn more about SBMM’s Flagship Society – Leave a Legacy through Bequests & Planned Gifts