Legal Question in Tax Law in Minnesota

IRA as Estate Beneficiary

Have a will that has 64% of estate going to charitable organizations and 36% going to family members. No spouse. Realize will controls. The IRA is worth $500,000. Estate worth over $1 million. Have other cash and securities in estate - how do we distribute or cash in an IRA when the estate is listed as beneficiary? What is the most advantegous tax way to distribute the IRA? Can the IRA be sliced and diced to the charities with the cash going to family members? What is the best way to distribute IRA - directly from IRA to charities or cash in the IRA to the estate first? Can a direct transfer from IRA to charities be done? And if so, how? Thank you for any help you can provide with this most difficult tax question.

Asked on 3/27/06, 12:38 pm

1 Answer from Attorneys

Craig Peterson Craig A. Peterson, Ltd.

Re: IRA as Estate Beneficiary

You definitely want to use the IRA to fund the charitable gifts because the charity will not have to pay income tax on the IRA funds as an individual would. You should be able to gift the IRA direct to the charities and the institution holding the IRA or the charities should be able to help you with the mechanics of doing this.

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Answered on 3/28/06, 8:16 pm

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