Philanthropy Puzzler: The SECURE Act | Sharpe Group
Posted April 2nd, 2020

Philanthropy Puzzler: The SECURE Act

The “Philanthropy Puzzler” features gift questions fundraisers may encounter in the field, followed by solutions from our panel of experts. If you would like to send us your own “puzzler,” please email us at with “Philanthropy Puzzler” in the subject line.


Philanthropy Puzzler

Jerome’s three children (ages 48, 47 and 45) are named equal beneficiaries of his IRA. His intent was to allow them to take distributions over their life expectancies and spread out the income taxes that would be owed  on the annual withdrawals. He read that under the SECURE Act, the ability to stretch out the distributions has been sharply curtailed. He has asked if he needs to revisit the IRA beneficiary designation.

Puzzler Solution

Under the SECURE Act, the children will have ten years from Jerome’s death to completely drain the IRA. If Jerome has charities to which he would like to contribute through his estate plan, he might consider having the IRA pass in equal parts to three charitable remainder unitrusts, naming each child as a beneficiary. There is no income tax owed on IRA funds when the balance passes to the unitrust, allowing the children to receive annual distributions on the full amount over their lifetimes, similar to taking the required minimum distributions from an inherited IRA. When the trusts end, assets will pass to the charities Jerome has named. ■

Print Friendly, PDF & Email

The publisher of Sharpe Insights is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Sharpe Insights may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

Sharpe Insights

Site Search

Sharpe Insights Archives

2024 Issues 2023 Issues 2022 Issues 2021 Issues 2020 Issues 2019 Issues 2018 Issues 2017 Issues 2016 Issues 2015 Issues 2014 Issues 2013 Issues 2012 Issues 2011 Issues 2010 Issues 2009 Issues 2008 Issues 2007 Issues 2006 Issues 2005 Issues 2004 Issues 2003 Issues 2002 Issues 2001 Issues 2000 Issues 1999 Issues 1998 Issues 1997 Issues