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 I can leave my family?
There is a well-known saying that when you pass away, there will be three primary beneficiaries of 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 your use of effective estate planning!
There are horror stories of very successful people leaving their families with enormous tax bills because of a poor estate plan. As an organization that cares for its donors and volunteers, we encourage you to consult 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 to make you more knowledgeable about this matter and help generate conversations with your professional advisors so a better, more appropriate plans for your estate can 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
These are assets where your beneficiaries may have to pay substantial taxes:
- Retirement Accounts (IRAs, 401Ks, 403b’s)
- Pension Plans
Example of an Estate Plan Considering 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 donating all the “tax-free” assets of stock and savings to BGCCF. To come up with the remaining $25,000, the family had to make 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 before other assets are used. 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 timeframe withdrawals are required.
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 Florida and reduced the tax burden and other major headaches for her family.
Boys & Girls Clubs of Central Florida does not provide tax, legal or financial advice. These materials have been prepared for informational purposes only, and are not intended to provide, and should not be relied on for tax, legal or financial advice. You should consult your own tax, legal and financial advisors before engaging in any transaction.
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.
Simply send your email or physical mailing address to Phillip Deal at email@example.com and request your copy. Phil can also be reached at 407-841-6855, ext. 103.
For any questions, details and more information about Planned Giving, please contact Phillip Deal, Director of Major & Capital Gifts at firstname.lastname@example.org or 407-841-6855, ext. 103.