Legacy IRA Experiences

[misanman]

Has anyone here used a traditional IRA to fund a Legacy IRA as permitted by the Secure Act 2.0? DW and I are 77 and I'm exploring the possibility of funding a Legacy IRA with a QCD. We haven't identified a particular charity yet so I'm reluctant to contact one in order to get details for fear that they will bug us to go through with it. I believe the funding limit for 2024 is $53,000.

 

[SecondCor521]

I have not.

I read a Forbes article about them (https://www.forbes.com/sites/bryanc...gacy-ira-has-finally-arrived/?sh=33f033b4219a) and I just don't see the appeal of a Legacy IRA.

If a person wants to be charitable, they can use regular QCDs. Like a Legacy IRA, QCDs are excluded from AGI, but the limits for QCDs are higher at $105K vs. ~$50K. And QCDs can be done each year instead of the Legacy IRA which is a once per lifetime option. Alternatively, a person can leave a portion of an IRA to charity either via beneficiary designation or their will; in these cases the amounts can even be higher, and it's still income tax and estate tax free.

Also, it looks like one of the Legacy IRA options leaves taxable income to the IRA owner or spouse. If one needs taxable income, why not just take it from the traditional IRA in the amounts needed?

It seems to me like this provision in the law was mostly a result of lobbying from charitable groups as a way to get access to funds in people's IRAs. Fine with me, I just don't see much of a use case for it from the IRA owner's point of view.