Retirement Funds

Qualified Retirement Plans may be the most tax-burdened assets you can own. If you die before you have taken all of your distributions from your IRA, 401(k), Keogh, SEP or other qualified plan, the balance remaining in your plan can be subject to multiple taxes that can claim up to 75% of its value for those in higher estate tax brackets.

Retirement plan assets may be subject to BOTH income and estate tax when you die. You can roll over your retirement plan at your death to your surviving spouse without incurring any taxes. When your surviving spouse dies, however, any remaining plan assets can become subject to multiple levels of taxation, including Federal income tax, Federal estate tax (partially offset by an income tax deduction) and generation-skipping transfer tax (GST) if the distribution is made to a skip person, such as a grandchild. This can create a scenario where as little as 25 cents on the dollar remains for your heirs.

If you have already decided to make a gift through your estate to Salesianum School, your retirement funds are often the best gift you can make. Such a gift allows you to leave more tax-favored assets to your heirs.