Retirement Assets - Nancy and Michael Levinson

Each time they leave the country, Nancy and Michael Levinson make sure that all important information is in order and their wills are up-to-date. Before one such trip, Nancy attended a women's seminar held by the Jewish Foundation and learned some startling facts about retirement assets.

Retirement assets such as a 401(k)s and IRAs, she knew, were growing tax free until the time of withdrawal. What she did not realize was that funds remaining in those accounts at the time of death are considered part of your estate for federal tax purposes. And unlike other assets left to heirs, retirement assets are also subject to income taxes.

Some families find that designating these retirement assets as charitable gifts and replacing them with other assets for their heirs makes tax-wise sense.

"After discussing this information with Mike, we made an appointment to speak with our tax attorney," said Nancy. "With his help we decided to name the Jewish community as the beneficiary of our retirement assets and leave our children assets that receive more favorable tax treatment."