By: Laurie Valentine-Acting President, CFO & Trust Counsel
For many, one of the largest assets they may own is their retirement account. And, unlike almost any other asset you own, there is potential for a double tax “hit” on the transfer of retirement assets at your death.
The value of your retirement accounts is part of what is counted in determining if your estate owes any federal estate tax (first tax “hit”) and, if you family is named as the beneficiary/new owner of the retirement account when they take funds out they will have to pay income taxes on what they take out (second tax “hit”).
To avoid the double tax hit, consider using all or a portion of a retirement account to fund the legacy gifts you want to make at your death. The portion passing to charity provides your estate an estate tax charitable deduction and, since the charity is tax exempt, the charity does not have to pay income taxes on what it receives from your retirement account.
For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.