Beneficiary - non profit?

[cdavis25]

Can a participant name a non-for-profit company as their beneficiary?

[mbozek]

why not? Many IRA owners and plan participants name charities as their beneficiary as a charitable contribution to reduce estate tax although with the fed estate tax exemption of $5.4 M only .2% of taxpayers are subject to fed estate tax. Taxpayers who live in states with low estate exemptions such as NJ (675K) can benefit from charitable contributions.

Although there is no estate tax deduction for death transfers to Non profits that are not charities, receipt of a distribution from a retirement plan or IRA is not taxable income to the non profit.

[cdavis25]

My gut was saying why not too...but I don't want to overlook anything.

[jpod]

Whether you are in an estate tax posture or not, if you are charitably inclined anyway you get more bang for the buck leaving pre-tax money to charity and more after-tax money to your heirs. Naturally naming a charity as beneficiary impacts MRD calculations, but if you are not so wealthy as to be in an estate tax posture maybe this wouldn't make much of a difference to you.

[austin3515]

Can anyone point me to a good article? I have a client who wants more information.