Expand Your Legacy: The Benefits of Giving Through a Qualified Charitable Distribution

By: John Tetzloff, Director of Sales

The end of the year is fast approaching, and with it comes the deadline to take advantage of current tax benefits. To ensure that your gift counts for 2024, it must be funded by December 31, 2024. With political changes looming and the uncertainty of future tax legislation, now is the time to act. Don’t wait—your wealth is yours to direct, and when you’re gone, it’s up to you to decide where it goes.

When people think of charitable giving, they often focus on cash donations or yearly contributions. However, there are many impactful and financially savvy ways to give. Successful charitable giving requires careful planning and understanding the various options available. Whether you’re considering giving now or planning a legacy, here are several powerful ways to expand your impact.

One common method is a bequest in a will, which can be a meaningful contribution but often gets mismanaged without proper planning. To avoid complications, it’s essential to keep your will updated and specific. Stocks are another smart way to give, as their performance can help determine suitability for donation. By placing stocks in a Donor Advised Fund (DAF), you can receive a tax deduction now while deciding later which charity will benefit.

Real estate can also be donated, either through a Transfer on Death (TOD) deed to avoid probate or through various trusts and funds, ensuring your property benefits charitable causes even after your passing. Establishing Charitable Life Insurance is another option, allowing you to make tax-deductible premium payments, with the full death benefit going to the charity when you pass. This approach enables you to leave a lasting legacy without tapping into your current assets.

Lastly, designating a charity as the beneficiary of a traditional IRA is a powerful strategy that can help you avoid substantial estate, federal, and state taxes, ensuring your contribution maximizes the benefit to the charity. However, there’s an even more impactful option available, particularly for seniors looking to enhance their charitable giving.

Support Your Local Parish Through Your Qualified Charitable Distribution

If you’re 70½ or older, you have a special opportunity to support your church or favorite charity through Qualified Charitable Distributions (QCD) from your IRA. By making charitable gifts directly from your IRA, you can potentially lower your tax liability while making a meaningful contribution.

1. IRAs and Seniors – QCD
   – Seniors can give up to $105,000 annually from an IRA.
   – Gifts can count as part of your Required Minimum Distribution, helping you avoid taxation if used for charitable gifts and any penalties for not taking the required distribution each year, starting at age 73.
   – These charitable distributions don’t count as income and aren’t subject to taxation.

2. Current Gifting Opportunities
   – Church members can use IRA distributions to fulfill their annual tithing obligations.
   – You can request annual contributions from your IRA directly to the church, benefiting both you and your place of worship.

3. Legacy Gifting Opportunities
   – Consider making one-time or annual IRA distributions to your church or charity.
   – You can also deposit IRA funds into a Charitable Annuity through Catholic United Financial Foundation, providing guaranteed growth for your assets.
   – Another option is to make an annual or one time contribution to fund Catholic United Financial Charitable Life Insurance, leaving a lasting legacy for your church.

Contact your Catholic United Financial Member Advisor to learn more about setting up a Qualified Charitable Distribution from your IRA.

Catholic United Financial and the Catholic United Financial Foundation are not permitted to provide tax or legal advice. The information provided is based on our understanding of the laws and regulations currently in effect. You may wish to consult your personal tax or legal advisor with questions about your specific situation.