Charities Face Delays Collecting Inherited IRA Gifts from Deceased Donors
Nonprofits are encountering significant delays in receiving inherited Individual Retirement Account (IRA) gifts left by deceased donors. While leaving an IRA to charity is a tax-efficient way for individuals to give, charities often face bureaucratic hurdles at financial institutions that can take months or years to resolve. Experts report that some brokerages and banks require nonprofits to open new accounts before releasing the funds, sometimes requesting sensitive personal information from employees or board members. These requirements consume staff time and resources, occasionally leading charities to abandon the gift altogether due to excessive administrative burdens. In response, several states have passed laws aimed at streamlining the process for financial institutions to release these assets without unnecessary delays or paperwork. Advocates argue that such reforms are essential as a growing wave of bequests from aging donors increases in coming years.
Topics: charity donations IRA transfers retirement accounts tax planning