Q.If a charity is listed as a beneficiary of a traditional IRA, what happens after the death of the IRA owner?  Does the estate have to withdraw the money from the IRA, give it to the charity, and have to pay income tax on the withdrawal with a deduction for the gift?  Or can the money pass directly from the IRA to the charity without paying income tax?

A.When you name a charity as a direct beneficiary of your IRA, the dollars do pass to that organization at death without any income-tax consequences for your heirs.   If you made a bequest to the charity in your will and your heirs move the monies by withdrawing it from the IRA, then they would have to pay tax.

A new law makes it easier for people over age 70 ½ to make charitable gifts from their IRAs in their lifetimes, but only this year and next.  You can donate as much as  $100,000 a year to a charity, tax-free.  The money must be paid directly to the charity, and it counts toward required minimum IRA distributions

With having multiple, large amount, 529 college savings accounts, how can I avoid gift taxes?  Also, what happens to assets remaining in the accounts after all the education expenses are paid?  Will there be tax consequences for the beneficiaries?

The money you put into a 529 is no longer considered part of your estate even though you still get to decide how to invest it.  With careful planning, you can avoid gift taxes by spreading out your contributions.  You can contribute up to $12,000 a year per child without incurring gift taxes.  You can also contribute up to $60,000 up front and a married couple can contribute double that.  For up front contributions, each spouse must live five years after the contribution, including the year the contribution was made, to keep the entire amount out of their estate.  If you die before then, a portion of the $60,000 would return to your estate. If you want to preserve your lifetime gift-tax exemption or use it for another gift, you could wait until a five-year period runs out, then make another five-year contribution. A 529 today is maxed at $250,000.

In regards to tax consequences for the beneficiaries if there are remaining monies in the 529, there would be some taxes to pay if you or the beneficiary decide to withdraw the money.  There is a 10% federal penalty on earnings, along with federal income tax.  You or the beneficiary could maintain the 529 account for future generations, allowing its earnings to continue to grow tax-deferred.