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Qualified retirement plans are those that receive favorable income tax treatment during the owner’s lifetime. The term “income in respect to a decedent” or IRD assets often cause sizable tax problems when estates are settled. In other words, the United States Congress encourages spending of the retirement funds during a person’s lifetime and discourages including them for the benefit of heirs.
An opportunity to use assets that stem from retirement funds for charity becomes an opportunity for a person considering a charitable gift to Oklahoma State University through the OSU Foundation. A careful review of all your assets with your tax advisor or legal counsel can satisfy your wish to benefit family members and also establish a legacy to benefit Oklahoma State University. 
Over $14 trillion is currently tied up in retirement plans, an extremely large number of dollars that potentially could end up in estates or become a source of charitable giving, or both.
Understanding Tax Consequences Understanding the tax consequences of different types of assets in your estate can help you devise a plan that suits your specific situation. As a rule, retirement assets appreciate. Assets that have appreciated receive a “stepped-up basis” upon the death of the owner of the assets. Designating these types of assets for Oklahoma State University Foundation can be attractive in terms of establishing your charitable legacy. While IRD assets can pass to a spouse tax free, leaving them in the estate can pose tax problems for the heirs, both as income tax, and an estate tax consequence. The tax consequences can be so high as to nearly deplete the benefit.
Lifetime charitable gifts tend to be favored in terms of tax law. For example, gifts of appreciated real estate and securities reduce taxation. Income tax laws usually favor charitable bequests of property that generate “income in respect of a decedent” or IRD. The largest source of IRD will likely be an IRA or a Qualified Retirement Plan (QRP).
Have you considered the types of assets that comprise your estate? Consider leaving your favorite charities your tax burdened assets for maximum benefit. Your attorney or tax advisor can help you devise a plan that passes these kinds of assets directly to your stated purpose at the OSU Foundation, or you can arrange for a deferred giving arrangement that pays income for life to named beneficiaries after which time the remainder assets pass to the OSU Foundation to carry out your charitable intent.
If you have any questions about any charitable giving information or opportunities to support a specific college or program, please contact the Office of Planned Giving at (800) 622-4678 or plannedgiving@osugiving.com.
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