If you’re planning to leave some money to charity when you die, and if you have an IRA, consider naming that charity as the beneficiary of your IRA. That will save the income tax your heirs would otherwise have to pay on it. Give your heirs “regular” money from outside your IRA instead — money on which income tax has already been paid. To the charity it won’t make any difference (charities don’t pay taxes); but to your heirs it will.

(One small drawback: with a charity as the beneficiary, you might be required by IRS regulations to withdraw money from the IRA faster, once you turn 70½, than if, say, your spouse were the beneficiary, thus exposing more of it to taxation.)

Tomorrow: How Paul Warburg Asks for $15

 

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