The Charity Parity Act has drawn wide attention for what it would add to the qualified charitable distribution toolkit. But for advisors who already know their clients' 401(k) plans well, the more pressing question may be what the QCD framework still lacks – even if the bill passes.
That's the informed take from Robert Westley, senior vice president and regional wealth advisor at Northern Trust, who spoke with InvestmentNews about the bipartisan legislation and its implications for high-net-worth retirees.
Introduced last week in both the House and Senate, the bill would allow individuals aged 70½ or older to make qualified charitable distributions directly from 401(k), 403(b), and 457(b) plans, eliminating a detour through an IRA rollover that can trigger fees and administrative friction.
Westley, who's among InvestmentNews' 5-Star Financial Planners for 2026, views the proposal with tempered enthusiasm.
"I think it's a positive improvement," he said. "There should be more parity between IRAs and 401(k)s just from a simplification standpoint and a procedural standpoint."
Following the 2017 Tax Cuts and Jobs Act, Westley said fewer taxpayers and clients – particularly retirees – elected to itemize their deductions because of new limitations that took effect. Many non-itemizers would choose to take the standard deduction, but in doing so didn't get to enjoy much benefit from charitable deductions they're eligible for.
"QCDs, for retirees who are taking RMDs, were a great way to satisfy their [required minimum distributions] and then also get an effective charitable deduction," he explained.
QCDs have grown even more appealing this year following changes introduced under the One Big Beautiful Bill Act, which placed new limits on charitable deductions for itemizers. As Westley noted, high earners now face a 0.5% AGI floor on charitable deductions; for those in the top bracket, the benefit is capped at the 35% rate.
"QCDs are a great way now to get an effective 100% tax write-off for your charitable giving," Westley said. "It's been a very popular planning tool among retirees who are drawing down RMDs."
For many retirement savers, the 401(k) rollover process can be daunting and onerous; in the case of serial job changers, that's led to an epidemic of forgotten 401(k)s, according to research by Capitalize. According to the sponsors and supporters of the Charity Parity Act, the need to roll over assets from 401(k)s or 403(b)s into IRAs also exposes long-serving workers' savings to a gamut of fees.
But from Westley's perspective at Northern Trust, the new legislation – assuming it pushes through – would have limited practical impact. For most clients, he said the rollover step the bill seeks to eliminate is one they're already taking as part of a broader planning and portfolio structuring strategy.
"I see clients tending to want to roll over their 401(k)s to IRAs," he said, referring to those who have gone through multiple employers and are looking to consolidate assets in retirement.
Clients typically make that move when they separate from service – often around age 65 – well before the 70½ age threshold when QCDs become available. The motivation, Westley said, is largely practical: they simply do not want to maintain an ongoing relationship with a former employer's plan. Moving to an IRA, he added, could open clients up to a wider array of investment choices.
Still, there's at least one specific group that would stand to benefit. "If you're someone that's in a great 401(k) plan – one with low fees and great investment options – that's a win," Westley said. "You're able to keep your 401(k) plan, take your RMDs and benefit from this QCD strategy without having to roll it over to an IRA."
Westley said the Charity Parity Act is a welcome step, but he also sees other constraints with QCDs that are worth addressing.
The first is the annual cap to QCDs, which for 2026 stands at $111,000 per individual. While Westley appreciates the fact that the cap is now indexed for inflation, he says it still falls short for many of Northern Trust's philanthropic high-net-worth clients with large RMDs.
"A lot of our clients have RMDs higher than $111,000, and they also have the charitable intent to give more," he said. "A higher annual limit would be beneficial for clients and for charities as well."
He also sees a more restrictive constraint from the fact that QCDs cannot be directed to donor-advised funds or private foundations. He says these have emerged as the charitable vehicle of choice for many affluent clients, and current rules fence off the QCD strategy from the very structures the wealthy have built their giving around.
"A lot of our clients use donor-advised funds in particular, and some have private foundations," Westley said. "If the QCD framework were more holistic in terms of the charitable vehicles it could benefit, that would be a significant win for clients."
The Illinois order refers to Brandon Ellington’s investment program as a “Ponzi-like scheme.”
But the Amazon executive chair seems to want it both ways, arguing that taxing the ultra-wealthy won't help struggling Americans.
Markets will always create reasons for investors to worry. The advisor’s role is not to predict uncertainty, but to help clients understand why volatility should not derail a well-built financial plan.
Plus, Asset-Map partners with Contio to elevate the advisor meeting experience, and MyVest claims an innovation in portfolio management with separately managed models.
Meanwhile, Cetera has drawn advisors managing around $390 million from LPL and Commonwealth, while Raymond James' financial institutions division announces its own LPL hire in Indiana.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
