12-06-2018 Columns

Three factors to consider when making charitable gifts The holiday season is here, which means gift-giving is probably on your mind. In addition to making gifts to your family and friends, you also may be interested in contributing to charitable organizations. But before you donate financial assets, such as stocks, you will need to consider several factors, including taxes, your portfolio balance and the reputation of the charity. Let’s look at these areas: Taxes – Your donations to qualified charities (those that are considered 501(c)(3) organizations by the Internal Revenue Service) can give you tax deductions – if you itemize deductions on your tax return. However, due to recent tax law changes, the standard deduction for 2018 has almost doubled, to $24,000 for married couples and to $12,000 for single filers. As a result, you may be less likely to itemize deductions, so you could have less incentive, at least for tax reasons, to make charitable gifts. However, if you give appreciated stocks, you may be allowed a charitable deduction for the full fair market value of the gift on the date of the transfer, even if your original cost was only a fraction of today’s value. Plus, you may not be subject to the capital gains tax you might have to pay if you eventually sold the stocks. Also, depending on your age, you might be able to use your traditional IRA as a charitable-funding vehicle. Once you turn 70-1/2, you generally must begin taking withdrawals – called required minimum distributions or RMDs – from your traditional IRA. (Roth IRAs are not subject to RMDs during your lifetime.) These RMDs from your traditional IRA are taxable, but you may be able to exclude up to $100,000 of RMDs per year from your taxable income if you transfer the funds directly to qualified charitable organizations. In any case, consult with your tax advisor before donating appreciated assets to a charity. Portfolio balance – When you donate financial assets to a charity, you are also taking them away from your portfolio. This could be an issue, especially if you repeatedly donate the same types of assets. For example, if you’re donating some growth-oriented stocks, will you lower the overall growth potential of your portfolio? You may want to consult with a financial professional to ensure your charitable gifts will still allow you to maintain a portfolio balance appropriate for your goals and risk tolerance. Reputation of the charity – You may want to do some homework to make sure you are giving to a reputable charity. Many experts on charitable giving say that a worthwhile charity should spend at least 75 percent of its income on programs, rather than administrative costs. You may be able to find this type of information on a charitable group’s annual report and its website. You can also browse the web for the names of agencies that evaluate charitable groups. By considering the aspects of charitable giving described above, you can get more satisfaction from your generosity – because you’ll know that your gift not only supports a good cause, but also fits well into your overall financial picture. Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Lauren’s Law helps increase organ donor registrations There is a tremendous need for organ transplants, with over 115,000 men, women and children nationwide currently in need of a lifesaving organ transplant, including more than 3,100 people here in our state. Another name is added to the national organ transplant waiting list every 10 minutes, and an average of 22 people die each day waiting for an organ. I sponsored Lauren’s Law to help dramatically increase the number of registered organ donors in our state, and we are seeing its positive results. Secretary of State Ruth Johnson recently announced that 66 percent of Michigan adults are now registered as organ donors. Especially during the holidays, it is wonderful to hear that two-thirds of all eligible Michigan residents have signed up to give the gift of life — up from only 27 percent in 2011. Lauren’s Law requires the secretary of state’s office to ask whether someone wishes to be added to the organ donor registry when applying for a driver’s license. The act is named after Lauren Shields, who at age 9 was placed on life support while waiting for a heart transplant and helped pass a similar law in New York. I want to remind Southwest Michigan residents that there remains a critical need for donors. Becoming an organ donor might just be the most impactful thing in someone else’s life that any of us ever do. Anyone can join the Michigan Organ Donor Registry, regardless of age or medical history. Residents can sign up at www.michigan.gov/organdonation, by calling 866-500-5801 or by visiting any secretary of state office. As always, I look forward to hearing your comments and feedback on the important issues facing Michigan. You can contact me at 517-373-6960.

What to know about Proposal 1 As many of you are aware, the recreational marijuana ballot initiative known as Proposal 1 passed with wide support on Tuesday, Nov. 6. Since ballot initiatives become law 10 days after election results are certified, recreational marijuana will go into effect no later than Dec. 6. This will be a major change to state law and I want to make sure you know what’s coming. Under the new la