LDS Financial Planning for High-Income Families: Beyond the Basics of Stewardship

Every member of the Church of Jesus Christ of Latter-day Saints understands life is not measured in financial assets. It’s measured by faithfulness. Those Church members with high income or business assets can generally benefit from holistic financial planning.

 

This type of planning isn’t simply about accumulation; it’s about the strategic management of resources to fulfill family obligations and spiritual covenants. Professional financial planning involves integrating tax-efficient wealth strategies - such as Donor-Advised Funds for tithing and mission-specific estate planning- with the core gospel principles of self-reliance and consecration.

 

While the fundamental counsel to avoid debt and pay an honest tithe remains the bedrock, high-earning families face unique complexities. From navigating the "gross vs. net" tithing question on complex compensation packages to funding multiple missions simultaneously, the stakes for wise stewardship are high.

 

1. The Stewardship Mindset: Moving from "Mine" to "His"

 

Your wealth is not yours; it’s God’s. Your job is to steward it well. An altruistic approach to wealth management can lead to higher life satisfaction and lower stress levels. A study published in the Journal of Personality and Social Psychology found that spending money on others (prosocial spending) provides a significantly greater boost to happiness than spending on oneself.

 

For the LDS professional, this means moving beyond the "prosperity cycle" often mentioned in scripture - where success leads to pride - and instead creating a "consecration cycle" where success leads to increased capacity for service.

 

2. Advanced Tithing Strategies for High Earners

 

For those with complex income streams (RSUs, stock options, or business ownership), the standard tithing calculation can become a source of confusion.

 

Tax-Efficient Giving via Donor-Advised Funds (DAF)

 

One of the most effective tools for advanced LDS financial planning is the Donor-Advised Fund (DAF) . Instead of paying tithes directly from a bank account with post-tax dollars, high-income families can contribute appreciated stock directly to a DAF.

 

• The Benefit: You avoid capital gains tax on the appreciation and receive an immediate tax deduction for the full fair market value.
• The Execution: You can then "grant" your tithing and fast offerings from the DAF to the Church. This effectively increases your "increase" by reducing the amount lost to the IRS.

 

The Gross vs. Net Conversation

 

While the First Presidency has stated that "tithing should be a tenth of [one's] individual income," they also clarify that the specific interpretation is between the individual and the Lord. High-income planners often consult with specialized financial advisers to determine how to handle business reinvestments, employer matches, and deferred compensation within their tithing calculations.

 

3. Mission Funding and Generational Wealth

 

The financial burden of supporting multiple missionaries can be significant. In 2026, the cost of a full-time mission continues to be a primary line item in LDS family budgets.

 

The "Missionary 529" Strategy

 

While 529 plans are traditionally for education, recent changes in tax law (such as the SECURE 2.0 Act) allow for more flexibility in moving unused 529 funds into Roth IRAs. For families with excess educational savings, these can be strategically reallocated to ensure that the "education of the soul" (a mission) does not drain retirement reserves.

 

Estate Planning for Heirs

 

Advanced planning requires a "transfer of values" alongside a "transfer of assets." Many high-net-worth LDS families utilize Incentive Trusts . These trusts can be structured to distribute funds when a child reaches specific milestones, such as completing a mission, graduating from college, or starting a family, ensuring that the inheritance fosters self-reliance rather than dependency.

 

4. Tax-Loss Harvesting and Faith-Based Investing

 

High-income earners often face significant tax liabilities. Tax-loss harvesting - the practice of selling losing investments to offset gains - is a standard practice that can be harmonized with LDS values. By reinvesting those funds into companies that align with the Church’s standards (avoiding tobacco, gambling, or predatory lending), members can ensure their portfolio is "consistent with the gospel of Jesus Christ."

 

5. Frequently Asked Questions (FAQ)

 

How do I handle tithing on a business exit or a large inheritance?

Large liquidity events should be viewed through the lens of "annual increase." Many families choose to treat the principal of an inheritance as "stored wealth" and tithe on the growth, while others tithe on the lump sum. Consulting with a faith-aligned CPA is recommended to manage the tax implications of such a large donation.

 

Should I pay tithing on my gross income or net income?

The Church does not take an official stance on this, leaving it to the conscience of the member. However, many high-income planners prefer "gross" to ensure they are contributing on their full earning power before the government takes its portion.

 

Can I use a charitable remainder trust for my tithing?

Yes. For those with highly appreciated assets (like real estate), a Charitable Remainder Trust (CRT) can provide you with income for life while eventually gifting the remainder to the Church or other charities, providing significant tax relief.

 

What else do I need to consider?

The best way to approach these questions is to work with a reputable financial planning firm.