The new SECURE Act recently passed by congress addresses distributions from your IRA, 401k or 403b. It states that beneficiaries of retirement accounts must withdraw inherited funds within 10 years. So, taxable distributions to most beneficiaries will be larger and the taxes they pay will be higher. But there is a solution – it’s called a Testamentary Charitable Remainder Unitrust.
This unitrust is a tax-exempt trust that is set up through your estate plan and will make income payments to your heirs for a term of up to 20 years. At the end of the trust, remaining funds are distributed to support a charity such as Kent State. So, you can give a gift of income to your heirs and then leave a gift to the university as well. In addition, this gift could reduce federal and state estate taxes, depending on your situation.
Establishing a Testamentary Charitable Remainder Unitrust is simple. For more information on these and other types of charitable trusts, contact the Center for Gift and Estate Planning at 330-672-1000 or email us at giftplan@kent.edu.
For more information on the SECURE Act, check here or contact your tax advisor.