Hold On Loosely: Challenges of Receiving IRA Gifts | Sharpe Group
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Posted January 28th, 2025

Hold On Loosely: Challenges of Receiving IRA Gifts

Key to receiving IRA Gifts - the RIFT Project - Planned Giving QCDsA large part of my planned giving consulting practice involves estate settlement. With that comes the repeated challenges of receiving IRA gifts to charity via beneficiary designation. 

When people pass away and leave money in their IRA accounts to charities, financial institutions often make it unnecessarily difficult for the charities to collect the money. Some financial institutions force the charities to open new accounts and provide extensive personal information to receive the funds. This process can take years to complete and may involve submitting paperwork multiple times.

Why? By holding onto the assets longer, the financial institutions profit from these delays by collecting fees. These actions are justified by the financial institution claiming they are doing so to comply with IRS regulations. This is untrue.

The RIFT (Release IRA Funds Timely) project is a pro bono organization that helps charities navigate this complex process. RIFT offers resources such as a database of IRA custodians and sample letters that charities can use to advocate for themselves.

RIFT also advocates for change at the state and federal levels. For example, Iowa recently passed a law that prohibits financial institutions from demanding excessive personal information from charities and requires them to pay claims promptly. The law has already been successful in helping charities receive their funds quickly. RIFT has developed a model law based on the Iowa law that other states can adopt.

Donors often choose to leave money to charities from their IRAs and other retirement plans because of the tax benefits. It’s also an easy and no-cost way to include a charity in their estate plans since making a change to a will can result in attorney fees. At Sharpe Group, we encourage our nonprofit clients to highlight the advantages of beneficiary designations in their planned giving marketing because of these reasons.

As this type of charitable giving becomes more common, it’s incumbent upon charities to push back and follow the process outlined by the National Association of Charitable Gift Planners so their donors’ wishes are carried out in a timely manner and charities receive the funds the donor intended.

Learn from Kristin at the Sharpe Virtual Academy: Planned Giving #101—The Fundamentals of Effective Gift Planning, Feb. 19-20.

Kristin Croone, JD, Sharpe Group Senior Consultant for planned givingKristin Croone, JD, is a senior consultant who assists her clients with estate settlement as well as provides advice and develops strategies for successful planned giving programs. Connect with Kristin at kristin.croone@sharpegroup.org or via LinkedIn. Learn from Kristin at

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