Published May 4, 2022

Leaving behind a huge tax bill with the stretch IRA now gone? Here’s a way to make your IRA’s tax-deferred benefits continue to stretch for your beneficiaries.

A stretch IRA was an estate planning strategy that extended the tax-deferred benefits of an IRA inherited by a younger beneficiary (non-spouse beneficiary) who was able to withdraw the IRA funds over the beneficiaries longer life expectancy.  

Legislation known as the SECURE Act took effect in 2020 eliminating the stretch IRA for those younger beneficiaries (defined as at least 10 years younger than the original IRA owner). The law requires the younger beneficiary to withdraw all funds within 10 years, accelerating the tax liability. 

However, for philanthropically minded individuals, there is a planning option that uses a testamentary charitable remainder trust (testamentary CRT) to stretch the tax deferred benefit of the IRA for the combined benefit of charity and families. An IRA owner can create income for kids or grandkids while also leaving an indelible mark on Rutgers. 

How it works: 

  • IRA owner sets-up a testamentary CRT in the estate plan (state law may dictate the structure) and names the testamentary CRT as beneficiary of the IRA. 
  • Upon the owner’s death, the IRA assets transfer to the testamentary CRT generating a charitable estate tax deduction. 
  • The testamentary CRT distributes income to non-spouse beneficiaries for their life or for a term of years up to 20 years. 
  • When the income period terminates, the remaining testamentary CRT assets are released for charitable purposes at Rutgers as designated by the donor. 

If you would like to learn more about this or other estate planning strategies, please contact the Rutgers University Foundation gift planning office at 888-782-3666 or

This information is not intended to be, nor should it be relied upon as legal advice. For assistance with your situation, consult an attorney or other professional adviser.