The following are options to consider when choosing to name the CAF as a beneficiary in your investment portfolios and retirement accounts:
1. Investment Portfolios: Designating the CAF as the beneficiary of investment portfolio assets is a great way to leave a gift to the CAF. Charitable giving may help you minimize taxes while also supporting the causes that are meaningful to you. It is a good practice to review and consider the named beneficiaries on your investment accounts periodically. This is important because life can change quickly, and it may not be on your radar to make sure your wishes are followed. If you are thinking about making such a gift to the CAF, be sure to check with your tax and legal professional.
2. Retirement Accounts: Designating the CAF as the beneficiary of retirement assets is one of the smartest ways for you to make a gift to the CAF and bypass multiple levels of taxation. Qualified retirement savings are generally subject to federal income tax as they are withdrawn from the plan. Failure to take the required minimum distribution after the age of 70 1/2 results in a 50% tax on the undistributed amount. Naming the CAF as the beneficiary of a retirement plan will reduce the size of a taxable estate and avoid income taxation on those funds. These taxes can consume up to 75% of the retirement assets. Careful planning for the disposition of retirement plan assets can help to avoid undesirable tax costs. In certain situations, a charitable gift of a retirement account can improve the donor's overall tax consequences, increase the amounts passing to their heirs, and escape income and estate taxes. At death, any remaining account balance is included in the calculation of the gross estate and may be subject to both income and estate taxes. Lastly, a generation-skipping tax may apply to substantial account balances that pass to grandchildren or to other remote generations.
If you are interested in naming the CAF in your investment portfolios or retirement accounts, follow these next steps:
1. Contact the CAF Development Office at 214-330-1700 or email@example.com for additional information on naming the CAF as a beneficiary or to chat about the different options for including the CAF in your investment portfolios or retirement accounts.
2. Seek the advice of your financial, legal and/or tax advisor.
3. If you include the CAF in your plans, please use our legal name and Federal Tax ID. Legal Name: Commemorative Air Force Address: P.O. Box 764769 Dallas, TX 75376 Federal Tax ID: 74-1484491
4. Print out, complete and return the Heritage Club Membership form. This will provide valuable information to the CAF about your decision.
Note: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Please contact your tax advisor for specific guidance for your situation.