Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated July 28, 2026. Quick answer: If you are giving anything to charity, the traditional IRA is almost always the asset to give. A charity pays no income tax on it; your children would pay ordinary rates across ten years. Give them the taxable brokerage account instead — it gets a basis step-up.
The asymmetry
| Asset | To a child | To a charity |
|---|---|---|
| Traditional IRA | Ordinary income, emptied in 10 years | No tax at all |
| Taxable brokerage | Basis step-up at death — embedded gain forgiven | No tax, but the step-up is wasted |
| Roth IRA | Tax-free, 10 years | No tax, but the Roth’s advantage is wasted |
Each asset should go where its tax character is worth most. The traditional IRA is the only one carrying a large embedded income-tax liability, so it belongs with the recipient who does not pay income tax.
This is one of the highest-value and least-known moves in estate planning, and it costs nothing to implement — it is a beneficiary designation change, not a document rewrite. Giving the same total to the same people, arranged differently, can save the family a large amount.
Get the inherited-account decision right the first time
Deciding when to take money out of an inherited account is a tax question as much as a rules question, and an adviser can price the withdrawal schedule against the rest of your income before a deadline sets the timing for you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
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Mixing charity and family in one account
Naming both on a single IRA can complicate treatment for the human beneficiaries. Cleaner to dedicate one account to charity and others to family, or to split promptly after death — see the separate-accounting deadline.
Sources
SECURE Act (2019); SECURE 2.0 (2022); final RMD regulations published 19 July 2024; IRC §401(a)(9); IRC §1014 (basis of property acquired from a decedent); IRC §664 (charitable remainder trusts). Cross-checked July 2026 against professional analyses from Kitces, Grant Thornton, Ascensus, Charles Schwab and Kiplinger. Indexed figures and state-specific rules are flagged rather than asserted.
This states what the cited authority says. It is not tax or legal advice, and beneficiary planning turns on family facts and state law that no page can see.