Th​e Setting Every Community Up For Retirement Enhancement Act (SECURE Act) that was passed into law in December 2019 created several significant implications for charitable giving:

Increases the Age for Required Minimum Distributions (RMDs) to Age 72
The SECURE Act increased the age requirement for RMDs from 70 ½ years of age to 72 (The CARES Act suspended RMDs for the remainder of 2020). However, individuals who began taking their RMD at age 70 ½ prior to passage of the law, must continue taking their RMD.

Repeal of the Maximum Age to Contribute to an IRA
The new law allows individuals of any age to contribute to a traditional or Roth IRA. This provision allows individuals over age 70 ½ with earned income to continue contributing to an IRA. The deduction limit for 2020 is $6,000 for total contributions to both traditional and Roth IRAs, and a $1,000 catch-up contribution for individuals age 50 and older. The deduction may not exceed taxable compensation.

Ten-Year Distribution Rule
The SECURE Act also establis​hed a new 10-year distribution rule for inherited qualified retirement plans (QRPs) such as a 401(k), 403(b) or IRA, that are passed on at death to individuals other than a spouse and limited groups identified by the law. Under prior law, the recipient could spread these distributions over their life expectancy, which stretched out the taxes owed. While the law does not require the recipient to take the distributions in equal increments, it does require that distributions from the QRP be taken over a period no longer than 10 years following the death of the retirement plan owner. The new law does not apply to QRPs that were inherited prior to passage of the SECURE Act.

One way that individuals with philanthropic intent can extend the 10-year distribution period for QRPs is to create a charitable testamentary remainder unitrust as outlined below:

  1. The donor designates Washington University as the death beneficiary of their QRP and creates a provision in their estate plan to establish a charitable testamentary remainder unitrust in which their heirs are named beneficiaries of the trust.
  2. Upon the donor’s passing, the retirement plan assets transfer to the university to fund the charitable trust.
  3. Income from the trust is paid to the named beneficiaries for a term of years (the maximum term is 20 years). This saves on taxation of retirement plan assets.
  4. When the charitable trust ends, the remainder of the trust assets is distributed to Washington University for the purpose that the donor designated.
  5. If the donor’s circumstances change, they can modify their gift during their lifetime.

Benefits of a Charitable Testamentary Remainder Unitrust

  • Assets transferred to the charitable trust are tax exempt, so 100 percent of the QRP goes into the trust. Retirement plan assets are some of the best assets to contribute to the trust. When these assets are given to individuals other than a spouse, they are subject to both income and estate taxes, which may significantly reduce their value.
  • Income from the trust can be paid to multiple beneficiaries for a term of years or in some cases for their lifetimes.
  • Assets provide annual income to beneficiaries for a period of up to 20 years.
  • The average inheritance is spent within five years. A testamentary charitable remainder trust can provide a boost to the recipients’ annual income without allowing them to deplete the asset.
  • The ability to support an individual who cannot or should not receive a lump sum inheritance (child with special needs, child who is not financially responsible, etc.)

A Charitable Gift that Gives Twice

A WashU alumna’s estate includes a $3,000,000 IRA. The chart below demonstrates how a testamentary charitable unitrust can extend payments to her three adult children for a 20-year period and provide a significant gift to WashU.​​​​​​​​​​​​​​​​​​​​​​​

IRA to testamentary unitrust with remainder to WashU​IRA to 3 adult children
(no gift to WashU)
Income & Estate Taxes
(24% tax bracket)
Principal from IRA
to children (subject
to 10-year
distribution rule)​
Unitrust income to children
(20-year term)
Total payment to each child$1,156,183$760,000
Gift to WashU when
trust terminates

For further information on charitable testamentary unitrusts and the SECURE Act, click here, or contact the Office of Planned Giving at 800-835-3503 or