Estate Planning With Bequests

You have several smart choices to direct the maximum inheritance to loved ones after you are gone. But if your estate is sizable, minimizing the federal estate tax stands head and shoulders above all others.

Consider a Charitable Bequest
By making bequests of particular assets to Sisters Hospital Foundation, which is exempt from federal estate taxes, you can actually preserve more of your estate for the benefit of loved ones. For example, IRAs and other retirement plan assets are taxed twice at death, first as part of your taxable estate and second as income to the beneficiary. Rather than leaving IRA or retirement plan assets to family members, consider the following alternative.

Example: Betty plans to leave $250,000 to her niece, Karen, and $250,000 to The Foundation. Among her assets, Betty owns a $250,000 IRA. If she leaves the IRA to Karen, it will be subject to estate taxes (a rate of 45 percent in 2009) and income taxes at Karen’s marginal rate (25 percent). Instead, Betty plans to leave the IRA to us and less tax-burdened assets to Karen. Thanks to the unlimited estate tax charitable deduction, no estate tax will be levied on the IRA. And because our organization is tax-exempt, we won’t owe income tax either.

Please call Julie Snyder at 716-862-1992, or e-mail us at jsnyder@chsbuffalo.org, for more information.

The information in this Web site is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income tax include federal taxes only. Individual state taxes and/or state law may impact your results.