If you’re not sure financial planning is right for you, you’re probably underestimating the value of your current and future assets, overestimating the complexity of trust funds and other arrangements or minimizing the impact of income and inheritance taxes.

Without enforceable, written planning in place, the personal financial affairs of LGBT individuals are subject to legal “default” rules that were not designed with our needs in mind. These rules favor relationships based on marital and biological ties.

You cannot “opt out” of financial and estate planning. If you ignore these matters and become disabled or die without a legally enforceable plan, state law “writes” a plan for you.

Stonewall Community Foundation is here to work with you and your financial advisor—contact us to learn how.

The Most Tax-Efficient Way to Give

To encourage contributions to nonprofit organizations, the Internal Revenue Service (IRS) allows you to deduct all or a portion of the value of your charitable donations from your taxable income. This is generally true if you itemize your tax deductions and if the charities you support meet the requirements of Sections 501(c)3 of the tax code (like Stonewall).

The precise amount by which a specific donation can reduce your taxes depends on several factors, including the type of asset, how long you have held the asset, and, in some cases your income level.

When you donate cash, for instance, you can usually deduct the full amount. But donations of securities are treated differently.

Donating Appreciated Securities

The tax code provides a double benefit when you donate appreciated securities, such as stocks and mutual fund shares held for more than a year. In such cases, you can deduct the full market value of your gift (within your income limits) without realizing a capital gain. If, instead, you had sold the same securities and donated the cash proceeds of the sale to charity, you would have incurred long-term capital gain tax.

Deferred Giving and Taxes

You can also avoid taxes by donating assets to a charitable remainder trust or naming a charity—like Stonewall—as a beneficiary of your will, life insurance policy, or tax-deferred retirement plan. For instance, taxes can claim much of your traditional IRA after you die. But, as a beneficiary of your IRA, a charity would keep all of the assets that would otherwise be going for taxes.

Direct Giving

Giving directly to charities, either by cash gifts or by donations of appreciated securities, makes sense if you already know which organizations you want to support and you want the charities to receive the gifts with the least possible delay.

But direct giving has its drawbacks. It requires you, as the donor, to conduct research, evaluate each charity, and keep records of your gift receipts for tax purposes. It gives you little or no opportunity to create a giving strategy or to see your contribution appreciate in value. Also, some charities are not operationally equipped to accept donated securities or even credit cards.