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THE PENSION PROTECTION ACT AND LGBT BENEFITS When the Pension Protection Act of 2006 became law, the LGBT community won important legal protections as well as an unprecedented opportunity to help LGBT nonprofits. Under the new law, a non-spouse beneficiary – including same-sex partners – can transfer inherited assets from a 401(k) or other retirement plan into an Similarly, under the Hardship Distribution rules, individuals who list their same-sex partners as beneficiaries under a 401(k) plan can now withdraw monies from their retirement fund in case of the partner's medical or financial emergencies – previously, this was only possible for legally recognized spouses and dependents. The legislation also includes a limited-time provision for contributions from IRAs to nonprofits. Between now and December 31, 2007, you have a window of to increase your impact on Cream City Foundation and your other favorite LGBT organizations:
The provision does include some limitations. For example, the distributions can only go to qualified charities as defined by federal regulations, and you can’t use these distributions to fund donor-advised funds, charitable remainder trusts, or charitable gift annuities. Depending on your circumstances, there may also be more tax-efficient ways for you to make a gift. (However, IRAs and other retirement plans continue to be excellent vehicles for posthumous gifts.) Another important change is the fact that starting in 2007, charities are required to provide donors with receipts for all cash donations, regardless of the amount. Donors, therefore, will now need to keep all records documenting their cash donations or run the risk of losing these deductions. There are other provisions in 2006 Pension Act which you may find interesting and applicable to you. As always, we recommend that you seek the advice of financial and/or legal professionals before deciding on a course of action.
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