Are You Leaving a Tax Burden for Your Heirs?


You may be leaving a huge tax burden for your children or heirs. Here’s how to disinherit the government while establishing your legacy and helping secure your children’s future.On the day you graduate from this earth, everything you have will pass on to someone else to steward. Properties, vehicles, accounts, cash—everything. You might already be planning for this and named your spouse as the beneficiary of your estate if you pass on before him or her. But what happens when both you and your spouse have left this world for the next? (Financially speaking, that is.)

Most people assume their assets will simply pass on to their children, and it most likely will… after the IRS has taken their 30 – 35% cut. What if there was another way?

The Tax Burden on Your Heirs

It all happens unexpectedly for many people who inherit their parents’ estate. When a person and surviving spouse passes away, their estate passes on to their children. But when the kids go to cash in the remaining fund in their parents’ IRA or 401 (k) account, the IRS steps in and charges them ordinary income tax on it. This is called the Income in Respect to a Decedent (IRD) tax—and it is truly the most overlooked tax in America.

In fact, even financial experts can forget all about it until it’s too late… like this banker I met once.

Didn’t See that Coming

The gentleman strode up to me directly after a planned giving presentation I made at a church. His eyes were wide as he said…

“Richard, I have been in finance all my life. Nobody’s ever talked to me about IRD taxes. Nobody ever brought it up. I never thought about it.”

Think about that! A banker, a career finance man, who had never thought about the tax burden he would be leaving to his children. He continued.

“I have over $3 million in qualified retirement funds. My wife and I plan to travel when I retire, and we intend to use that up. But if we don’t, I am happy to give that to my church—I never thought of that as a part of my estate planning!”

The sad reality is that most professional finance and legal counsel are not trained or set up to help you set up your estate plan in a way that passes on your values as well as your valuables. And this missing focus on charitable estate giving would have affected this banker personally. His two daughters would inherit the estate—and all the IRD taxes that would come with it. But now that he knew about the IRD tax, he was happy to make a gift to the church from his remaining retirement funds and lower the tax burden his daughters would be responsible for.

3 Asset Destinations

There are only three places your remaining assets can go when you pass away.

  1. Your Children and/or Heirs
  2. The IRS
  3. Charity

By default, your children and/or heirs will inherit the remaining funds in your IRA or 401 (k) accounts—and so will the IRS through the IRD tax. But if you choose to send a portion of your remaining assets to charity, you can significantly lower the tax burden your children will have to pay when you and your spouse pass on.

By naming a charity in your will or estate you can significantly lower the tax burden your children. Share on X

Leaving a charitable gift in your estate or putting a charity, ministry, or church in your will is something that you have control over for now. And by choosing to give to charity out of your estate, which is much easier than you may think, you can disinherit the government while leaving a strong legacy for your children and the world.

An Overlooked Opportunity

Most people haven’t placed a charity into their estate plan. They just haven’t thought about it. They’re generous, wise people—it just never came up. But you can change that today.

You can leave an inheritance that will care for your heirs and a legacy that will impact your community by placing a charity or church in your estate plan. And if you need some experts guides to help you lower the tax burden on your children, our estate planning counselors would be happy to speak with you.

The call is free and there’s no obligation. So, let’s talk!