Givzey Guidance: How Do I Document a Pledge of a Future Required Minimum Distribution (RMD)?

Givzey Guidance: How Do I Document a Pledge of Future Required Minimum Distribution (RMD)?

Question: How Do I Document a Pledge of a Future Required Minimum Distribution (RMD)?

Question: How would I document a pledge from an individual for a future required minimum distribution (RMD) from a retirement account? This person is not currently old enough for an RMD.

Answer:

This pledge agreement needs to document the specific amount of the pledge, its purpose/designation, payment period for the gift, and be signed by the donor. A digital signature is acceptable. The time period for a donor to fulfill a pledge typically does not exceed five years.

If this person wishes to pledge a specific dollar amount in a certain month within the next five years, you can document it as a pledge payable in one installment. It doesn’t matter to you if the money comes from a checking account or a personal IRA/401K. As always, receipt wording will be different if the gift is a charitable gift from an IRA or 401K.

If the prospective donor can’t give you a specific amount for the gift or the timing of the gift is more than five years out, it would be better to use a Letter of Intent (LOI). An LOI is not a bookable pledge but is still an important way to document the donor’s intent.