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

Jeff has over 30 years of experience in the investment industry. He currently holds his FINRA Serices 6, 63, 66, 7, 24 & 51 licenses with LPL Financial as well as his health and life insurance licenses.