Strategy for Gifting from 401K for Ministry

At 60, “Chris” and his wife have benefited from a significant exit and have been investing their time, talent and treasure in a variety of charitable and impact investing endeavors.  Their assets are more than adequate for their lifestyle and estate planning needs, and they would always love to do more for their favorite causes. 

When they heard about the opportunities presented by the CARES Act, they were reminded about a  modest ($200k) 401k they have from Chris’ last job, and realized this would be an opportunity to transfer the asset to their charitable accounts tax free. 

So, the plan is to cash out the 401k, distribute it to their investment account, thereby increasing their AGI by $200K.  They will then gift 60% of their new AGI to their NCF Giving Fund and open a couple of NCF Single Charity Funds to handle the rest of the $200k gift. 

The result is they will have re-deployed this 401k to their charitable endeavors, tax free.