National Estate Planning Awareness Week, October 19–25, 2026
A resident of Delaware County, after years of contributing to the community, faced the pivotal question of how to give back to a place that had been so integral to their life. The solution lay in their Individual Retirement Account (IRA).
Upon reaching the age of 70½, this individual began making qualified charitable distributions (QCDs) from their IRA. These contributions established a Fund for Delaware County, designed to address the county’s evolving needs as they emerge.
Unlike funds restricted to specific causes, this donor opted for a permanent endowment managed by the Foundation, providing the flexibility to address diverse community needs whenever necessary.
The importance of such flexibility became evident as Delaware County navigated unforeseen challenges, including a pandemic that severely impacted businesses and nonprofits. Additionally, over 77,000 residents experienced disruptions to their SNAP benefits, and the closure of the county’s largest healthcare provider resulted in a significant reduction in treatment services. These events underscored the unpredictable nature of community needs.
Donors benefit from tax advantages as gifts transferred directly from an IRA to the Foundation typically bypass income tax. Furthermore, once required minimum distributions commence, QCDs can fulfill the annual withdrawal requirement.
An alternative strategy involves naming the Foundation’s fund as the IRA’s beneficiary. This approach eliminates the need for updating wills or incurring legal fees. Upon the account holder’s passing, remaining assets seamlessly transition into the fund, perpetually benefiting Delaware County.
The permanence of the fund ensures its growth, as collective investment strategies can amplify the impact of individual gifts, creating a lasting legacy for future generations.
Why an IRA Can Be a Taxable Inheritance for Your Children
Despite seeming counterintuitive, a traditional IRA may become one of the most heavily taxed assets passed on to loved ones.
Generally, funds within a traditional IRA have not been taxed. When beneficiaries withdraw these assets, they are typically liable for ordinary income tax. According to current regulations, most adult children must fully deplete an inherited IRA within ten years, often during their peak earning period, potentially pushing them into a higher tax bracket and reducing the inheritance’s net value.
Unlike individuals, charitable organizations generally do not incur income tax on IRA distributions. Thus, when the Foundation receives a gift from an IRA, every dollar benefits the community.
Some families choose a strategic division of their estate:
- Allocate retirement accounts, or portions thereof, to charity.
- Pass down property, investment accounts, and life insurance to heirs.
This division can provide more favorable tax outcomes for beneficiaries, allowing a larger portion of assets to reach intended recipients.
What It Takes
Designating the Foundation as a beneficiary is a straightforward process:
- Contact your IRA custodian or log in to your account to request a beneficiary designation form.
- Designate The Foundation for Delaware County (EIN: 22-2540853) as a full or partial beneficiary.
- Inform the Foundation of your decision. They are available to discuss your intentions and ensure your gift aligns with your wishes.
You have the flexibility to designate a percentage of your IRA to the Foundation, with the remainder going to family. Direct gifts to The Fund for Delaware County, a specific cause, or a personalized fund. Beneficiary designations can be modified at any time.
Your Legacy, Your Community
Your contributions can sustain and enrich Delaware County for the future. While individual names may fade, the impact of our actions will endure.
During National Estate Planning Awareness Week, take a moment to review your beneficiary designations. If Delaware County holds a place in your plans, the Foundation is ready to assist in realizing your vision.
Seek guidance from legal, tax, or financial advisors to tailor decisions to your personal circumstances.
For more information, reach out to Monika Collins at mcollins@delcofoundation.org or call 610-744-1015.
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