Many individuals may feel they can't afford to be charitable during their lives. However, with the creative use of excess retirement assets, they are able to both contribute philanthropically as well as provide for heirs. Additionally, UJA-Federation may help preserve or perhaps even increase the amount of remaining assets available for heirs.

For instance, you can take advantage of the IRA Rollover Bill that was recently extended by Congress as part of the Emergency Economic Stabilization Act of 2008. This provision allows people age 70 1/2 and older to satisfy the annual IRA-required minimum distribution by making tax-free gift to a qualified charitable cause, such as UJA-Federation. This provision expires Thursday, December 31, 2009.

As a holder of traditional IRAs, 401(k)s, or other qualified retirement plans, you may not realize that you can leave your heirs only a small portion of the remaining retirement monies after taxes. You have not yet paid income taxes on this money. Therefore, just as IRA withdrawals are taxed during your lifetime, the remaining monies will also be taxed before they are passed to your heirs. However, in addition to income taxes, there are likely to be estate taxes and maybe even generation-skipping taxes also due on these inherited assets. In the end, up to 75 percent of your retirement money may be depleted in taxes.

Once retirement sets in, some individuals have found that they no longer need their IRA assets to maintain their lifestyles. In addition, people have seen their retirement accounts grow with remarkable returns. Individuals watch their stock-invested IRAs grow faster than they can or want to use them, even with market volatility. As a result, the assets continue appreciating well into retirement years. For example, upper-middle-class individuals may find they have in excess of a half-million dollars of unused IRAs. Finally, few have focused attention on the effect of the significant combined taxes associated with leaving any unused portion of these assets to their heirs. To maximize the use of the remaining portion of these assets, consider three charitable approaches.

Outright Bequest

Name UJA-Federation as the beneficiary of excess or unused retirement assets after your (or your spouse's) lifetime. Consider leaving heirs less-heavily-taxed assets rather than traditional retirement funds.

Charitable Remainder Trust After Your Lifetime

Create a Charitable Remainder Trust with UJA-Federation, naming the trust as the ultimate beneficiary of excess or unused retirement assets. The trust can provide income to your heirs for a period of years after your lifetime, and then the trust monies can fund charitable endeavors. Since it is a charitable trust, there is more money available to generate income for heirs.

Charitable Remainder Trust During Your Lifetime

Create a Charitable Remainder Trust with UJA-Federation during your lifetime, funding it with excess retirement or other assets. The lifetime benefits of the trust may relieve some of the tax burden associated with these assets.

By using your IRA funds for a charitable contribution to UJA-Federation, you may achieve a tax benefit while helping ensure that people can have the programs they need to survive economic hardship, make a deeper connection to their ancestral roots in Israel, or enjoy a Jewish learning or camp experience. So your IRA will be helping you and the causes you care about — both at the same time.

By using your IRA funds for a charitable contribution to UJA-Federation, you may achieve a tax benefit while helping ensure that people can have the programs they need to survive economic hardship, make a deeper connection to their ancestral roots in Israel, or enjoy a Jewish learning or camp experience. So your IRA will be helping you and the causes you care about — both at the same time.