Tis the Season to Gift

Tis the Season to Gift
09 Dec 2015

With the holidays heading into full gear, I wanted to discuss a few strategies available to those who are charitably inclined. Of course, you can gift $14,000 to anyone you wish annually, but these strategies are geared to benefit charities specifically.  Please discuss these concepts with your tax professional as I am only covering the key distinctions and not providing advice.

  • Charitable Remainder Trust (CRT)–allows you to pay yourself a dependable income and then distribute the remaining trust principal to charity. Income from the trust can even be directed to another (non-charitable) beneficiary.
  • Charitable Lead Trust (CLT)–offers you the potential to reduce gift and estate taxes on assets passing to your heirs by making charitable gifts; either you or your beneficiaries get the leftover trust assets.
  • Donor-Advised Fund (DAF)–You make an irrevocable contribution to a third-party investment account, realizing an immediate tax deduction; the account invests the money in an account you create. You advise the fund where the money goes and how it grows, but the fund makes the actual grants to nonprofits.
  • Lifetime Gifts–These are charitable gifts in which the donor retains no power or controls over the gift once made (irrevocable). A lifetime gift of this type is not included in what the IRS calls your “Gross Estate”.

Now is a great time to have these discussions with your financial/tax professional to see if any of these strategies can fit into your “philanthropic” part of your overall comprehensive plan.

Good luck and Happy Holidays!



Jeffrey Johnston

Jeffrey is originally from Solon, Iowa. He currently resides in Swisher, Iowa with his wife, Prudence, and his three children, Seth, Ian, and Roman. He graduated from the University of Northern Iowa in 1989, where he majored in Finance and Investments. He has 24 years of experience in the investment and estate planning business. He is currently the President of “Premier Investments of Iowa, Inc.” Jeffrey’s main focus is Estate and Investment Planning for Senior Citizens and Pre Retirees. Jeffrey became a Chartered Financial Consultant (ChFC) in 2001. He is the author of many articles on industry related topics and he is a frequent seminar presenter. He is a Board Member TRIAD Linn County Seniors Against Crime, and he is also a past Board Member of the Heritage Area Agency on Aging Task Force. He is a member of CEO Roundtable in Cedar Rapids, a Daybreak Rotary Member, and a member of the Cedar Rapids Estate Planning Council. In March of 2009, Jeffrey became the host of the Premier Investments of Iowa Financial Hour which airs every Tuesday Evening from 6PM -7PM, on WMT 600 AM Radio. In his free time he enjoys golf, fishing, scuba diving, traveling, and coaching son’s basketball teams.