Wealth Management Blog

Posts published in December 2015

3 Creative Ways to Make Your Donation Count – For You and Them

By JJ Burns

December 28, 2015

You’d like to make a major gift, and want to maximize the donation to help both you and the charitable organization. Maybe you own a piece of artwork or an item that would complement a collection. There are ways to make a donation that still allow you to enjoy the piece yourself.

Maybe you want to build or maintain a lasting legacy centered around your family values. You can involve your children and create a generational plan that will outlive you.  When considering donations, there may be some options you might not have considered for your planned giving. Your assets can help more than charitable organizations and your taxes— they may also help your heirs now or later.

Donor-Advised Fund

One of the fastest-growing vehicles for donating to philanthropies is the donor-advised fund or DAF. This is an alternative to a foundation. Typically, you make contributions with appreciated property, like stock shares and receive an immediate tax benefit. You avoid capital gains tax and get a charitable deduction for the value. Over time, you recommend grants from the DAF account.

You can make contributions to the account as often as you like. The gifts to the donor-advised fund can be invested and they grow tax-free while they are in the DAF.

DAFs can be set up and personalized to reflect your interests and values.   You can choose the name of your DAF to reflect your intention, such as “The Jones Family Fund for The Learning Disabled.” You can also choose a name that keeps you anonymous.

Want to make it a multigenerational family affair? Your children or family members can be involved as long as they are at least 18. Children or successors of your DAF may learn the importance of getting involved in a charity as well as the virtues of gratitude and humility.

Charity Lead Annuity Trust – “CLAT”

A charitable lead annuity trust or CLAT can give your charity regular donations and provide assets to your heirs.  By shifting investment assets into a CLAT, a Trustee whom you choose, can make a series of annuity payments over a number of years to one or more charities. At the end of a fixed time period the remaining assets are distributed to your heirs. The amount you deposit into a CLAT could provide you a significant tax deduction in the current tax year.

An example could be a 20-year CLAT set up from a large stock distribution or business buy-out. You want the annuity payments to benefit a cancer clinic over the next twenty years, after which  your heirs receive the remaining assets.  The benefits you receive are a significant present value tax deduction on the day the CLAT is funded, minimizing the size of your current estate and facilitating the passage of assets to the next generation.

In times of lower interest rates, CLATs are more popular because the present-value tax benefits tend to be greater. Keep in mind there is flexibility and a fair amount of customization to fit your needs in charitable trust planning.

Tangible Property

An ever-popular donation is tangible property. But don’t think there’s only one way to donate, and that the donation ends when you deliver it to the organization.

By working with your financial team and the charity, you can make a mutually-beneficial arrangement. One example could be a piece of artwork, say a painting or sculpture. By working together, you could make the donation but still get to display the piece on certain dates each year at your home.

This “fractional interest” in the property may accommodate your schedule. The time frame can be established in increments. Let’s say you contribute a 75 percent fractional interest in your fully-restored classic luxury car to a motor museum. You could retain custody of the vehicle three months of the year, while they display it for nine months.

Evaluate the Charities

It’s a good idea to do some research when choosing a charity for your donation. Making a site visit to the location can give you a better understanding of their mission. Remember you can direct or restrict your donation to any part of the charity you feel it is important to help. You should also speak with employees, administrators, and other donors. Don’t be afraid to ask questions or get involved.

You can also get an outside view of the charity through a growing number of online organizations. They track a variety of non-profit information, including their IRS filings, revenue and expense data, boards of directors, balance sheets, and annual reports.

Some of the most popular charitable information services are GuideStar.org, the BBB Wise Giving Alliance (Give.org), and CharityNavigator.org. Some of these online guides supply access to data, while others rank charities according to standards listed by each group.

Discuss Your Options

Don’t get frustrated thinking there are limited options for planned giving. There are many ways to make a lasting major gift to the charities of your choice. These donations can help those organizations while also helping you and your heirs.

As with any estate planning techniques mentioned above, it is vital to consult with your wealth management team inclusive of a qualified estate/trust attorney and an accountant.

Contact us to see how you can reach your charitable goals while also receiving tax benefits and creating a lasting legacy.

Financial Lessons from Charles Dickens’ “A Christmas Carol”

By JJ Burns

December 24, 2015

Famous miser Ebenezer Scrooge was introduced to readers in Dickens’ 1834 classic tale of redemption that takes place on Christmas Eve.  Scrooge has lived a life focused on growing his financial wealth with little regard for life outside his counting house.  In one remarkable evening, on a Christmas Eve seven years after the death of his partner Jacob Marley, he is visited by Marley’s Ghost and three other Spirits.  Their visits offer Scrooge an opportunity to objectively look at himself and others from an abstract point of view, and revisit his past actions and beliefs.  The now-famous result is well known, but we might ask, how does this apply to investors?

Seven years ago this very day, in the throes of the Financial Crisis, here’s where the markets sat compared to where they are today:

The global economy in 2008 was mired in slumping markets, broken banking systems, panic selling in every market segment and plagued with a lack of financial controls.  More pain and dislocation in the job and securities markets were waiting for investors in 2009 and beyond.  It was a very difficult period to navigate, from both an emotional and analytical perspective.

Now let’s fast forward to 2015.  Many investors are disappointed by market returns this year.  There are no global tailwinds at play (other than low oil prices), and different regions and countries are executing different monetary and fiscal policies.  We are truly in a state of global flux.  But we also think that as U.S. investors take stock of the year, there is certainly more to be thankful for in 2015 than during the Crisis.  We don’t mean to imply that everything related to the U.S. markets and economy has been rosy during the recovery, but the U.S. is certainly in a better place than many other areas of the world.  We can also confidently predict that we don’t know what will happen next year or the year after, but at this writing, we expect continued modest recovery in global growth and in modest returns for stocks and bonds.

We can also use Dickens’ three ‘spirits’ to help set our behavior and our expectations going forward:


  • DON’T focus on GREED (at any price) and FEAR (panic selling) due to lack of planning
  • DO focus on long-term results that are right for you,  NOT the short term noise


  • DON’T tinker and chase returns based on “feelings” and avoid short term opportunism
  • DO be aware and rebalance to your correct allocation as your plan calls for


  • DON’T ignore the lessons of the past and what the real data says
  • DO focus on what can be controlled – allocations, investments and EMOTIONS

Scrooge’s transformation occurred on many levels; most of us have a lot to be thankful for, too, and we hope that Dickens’ message of charity and forbearance resonates at this time of year.  

We offer best wishes for a peaceful and grateful holiday, and a Happy New Year!