Planned Giving

Gifts of retirement plan assets may include IRAs or assets in qualified retirement plans such as Section 401(k) and 403(b) plans, and plans designed for self-employed people. Retirement plan assets accumulate on a tax-deferred basis and may be subject to income tax, in addition to estate tax. When making a charitable contribution, it is usually best to transfer an asset that is subject to income tax (like a retirement plan) to a tax-exempt organization such as The Montclair Foundation, and leave the assets not subject to an income tax to your heirs.

Retirement plan assets can be contributed directly to The Montclair Foundation at death by naming the Foundation as a beneficiary on a beneficiary designation form provided by your retirement plan administrator. Retirement plan assets generally may not be transferred directly to any charity during your lifetime. However, income may be distributed from the plan to the donor and then contributed to the charity. Potentially taxable income will result from the distribution, but it may be offset by a charitable deduction. The charitable IRA Rollover, when in effect, allows certain IRA distributions directly to charity without including the distribution as taxable income to the donor.