SAM DEL ROWE, REPORTER, FINANCIAL ADVISOR IQ: I'm here with Aaron Leak, senior vice president at International Assets Advisory. How can charitable donations help clients when making IRA withdrawals?

AARON LEAK, SENIOR VICE PRESIDENT, INTERNATIONAL ASSETS ADVISORY: Charitable donations can be huge. So if a client has, especially as they get into RMD [required minimum distribution] age, I have a lot of clients-- or we run into a lot of clients, and I don't what other advisors do when their clients say, 'Hey, I don't need this money. And it's just a tax issue for me.' Especially if you have a pretty big IRA, and you have to take out a pretty big chunk of money out of your IRA and pay taxes on it.

One way that you can look at a strategy, you can look at within that IRA is the charitable donations. So if you have a charity in mind or a church, they have to be registered. There's some things that you have to make sure are done properly. But you as a client can take assets out of directly out of your IRA, send it directly to that charity or church or not-for profit, and that is essentially a non-taxable event for you. And you're obviously helping the charity within that.

But I have a lot of clients to take advantage of that. They say, 'Aaron, I don't need this money. It's just going to create a big tax situation for me. I already write a check to my church or to my-- or to this charitable donation. Can I do it out of my IRA?'

And the answer is yes, and it has to be funded directly out of the IRA to them. But it can be a huge strategy for a lot of clients that are running into major tax issues from their IRAs.

SAM DEL ROWE: Aaron, thanks for taking the time to chat with us.

AARON LEAK: Sam, absolutely. I appreciate the time. Thank you.

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Charitable Donations as an IRA Strategy for Clients

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