401(k) Willed to Church

[DennisM]

As a followup to a previous thread, how would a client best serve his church in making it the beneficiary of his 401(k) account?

1. If the church is named as a direct beneficiary can it treat the distribution as any other contribution, and not be taxed on it, or
2. Should an individual be named as beneficiary with the requirement that he/she donate the amount of the distribution to a certain church? (We might have a problem here in that the individual's income would not be over 50% of the distribution).

It boils down to the client's wish to donate his 401(k) to his church, but he doesn't want the church to have to pay any taxes on the previously untaxed income. What is the best way to accomplish this goal?

[Bees Knees]

I would have the client name his estate as beneficiary and then have in his will that the estate should donate the proceeds to the church on his death.