Impact their Lives
Leave a Legacy
Impact their Lives
Leave a Legacy
Good vs. Bad Assets
No asset is ‘bad’ when it comes to supporting your family after you pass away. But, with ‘smarter’ planning, your estate could have significant tax savings, provide additional support for your family and support the non-profits like Boys & Girls Clubs of Central Florida that you love.
What are good vs. bad assets to leave my family?
There is a saying that when you pass away, there will be three primary beneficiaries to your estate: 1) Your Family; 2) The Government; and 3) Your Favorite Charities.
How much each of those three entities receives is up to you and using effective estate planning!
There are horror stories of extremely successful people leaving their families with a poor estate plan that resulted in enormous tax bills leaving their families with nothing, or even debt. As an organization that cares for its donors and volunteers, we encourage you to consult with your financial and legal advisors to develop the best plans for your family and favorite non-profit organizations.
The ‘good’ versus ‘bad’ assets highlighted below are simply based upon the taxes your family may encounter once they inherit your estate. This information is provided here to make you more knowledgeable in this matter and help generate conversations with your professional advisors that could result in a better, more appropriate plan for your estate and honor your intent and wishes.
If your entire estate totals less than $11,000,000, the following assets could pass tax-free to your beneficiaries:
- Cash, Checking Accounts, Savings Account
- Money Market Accounts or CDs
- Real Estate
- Life Insurance
- Brokerage Accounts including stock, mutual funds or bonds
- Roth IRAs
Assets where your beneficiaries will have to pay taxes include:
- Retirement Accounts (IRAs, 401Ks, 403b’s)
- Pension Plans
Example of an Estate Plan Considering a Charitable Gift and Bad vs. Good Assets:
Mrs. Generosity decides to leave $100,000 to Boys & Girls Clubs of Central Florida in her Will. At her passing, her assets include a home valued at $250,000, $50,000 in stock, $25,000 in savings and $400,000 in her IRA.
Because Mrs. Generosity didn’t effectively plan her estate and how $100,000 would pass to BGCCF, the family had to make decisions that resulted in having to donate all the “tax-free” assets of stock and savings to BGCCF. To come up with the remaining $25,000, the family had to take a withdrawal from her IRA that included some taxes and possible penalties or use the home as collateral for a loan or sell the house.
Mrs. Generosity adds Boys & Girls Clubs of Central Florida as a partial beneficiary to her IRA account for $100,000 in her estate plan. For safe measure, Mrs. Generosity includes a provision in her Will that states any charitable gifts should come from her IRA. At her passing, the home, savings and stock all go to her family with no tax penalties. Since her IRA account was reduced by $100,000, her family will pay less income tax during the next 10 years or less.
With some simple planning and a little strategy, Mrs. Generosity gave the most impactful and largest gift she ever gave to Boys & Girls Clubs of Central and reduced the tax burden and other major headaches for her family.
IRA Charitable Rollover
Donor Advised Funds
Charitable Gift Annuity
Gifts that Pay You Income
Ways to Give Smarter
Request our Free Estate Planning Guide
Because our organization believes so strongly in the importance of you having a Will that honors your wishes and protect your family, we have a FREE Estate Planning Guide that we will send you. The guide is a thorough step-by-step review of things to consider when creating your estate plan. It will save you valuable time and resources by helping prepare important documents and information before meeting with your professional advisors.