Investor’s column: How we give can speak volumes

It’s the season to give and receive.

Most of us have done plenty of receiving, but suppose you’ve kept it at home because charity begins at home. Now you feel it is time to give something back outside the home.

Check with your attorney and tax adviser to see if these or other situations may offer tax or other advantages and may be suitable for you.

Sometimes giving back does not involve money or items. It could be volunteering time or expertise.

You might give advice to newlyweds, kids wanting to know about college, or grandma deciding which retirement facility to use.

When it comes to giving things, it’s generally best not to expect their return or even their usage. Kids don’t want that sterling silverware in the walnut box. They might have it melted down and spend the money on their needs and wants.

When it comes to money, there are lots of ways to give and it usually is appreciated. If you’re wealthy, why not give $10,000 to your favorite charity or college?

If you are serious about giving or gifting, there are many different approaches. The easiest way is to give money, land, securities, cars or anything else to a legal, charitable organization.

Once given, it can’t be returned unless the charity cannot accept your gift.

Usually when you give items, they have no strings attached. There are some exceptions, though.

One of my favorite ways is by using a Donor Advised Fund handled through a brokerage account, trust company, mutual fund or elsewhere.

Imagine you start a personal foundation, such as the Jim Zientara Family Foundation, with a donation of $10,000. Add more money whenever appropriate.

The money is invested according to the objectives selected from the fund’s guidelines and a tax write-off is received in the year of the gift. The charities named can be altered.

You direct that one year the fund sends $500 to an approved, legal charity. Another year you might direct that $500 be sent to a different charity. You direct where, when and how much money is given.

An irrevocable Pooled Income Fund sets aside money for charity, avoids capital gains taxes on appreciated assets and allows you to take an immediate partial tax deduction.

The Pooled Income Fund is invested and pays you and your beneficiaries whatever income is produced. Once the last named beneficiary dies, the remaining balance goes to your named charities.

You may be familiar with annuities. The Charitable Gift Annuity exchanges an irrevocable gift in cash or marketable securities for the annuity that pays one or two “annuitants” a fixed sum annually for life.

Once both have passed away, the Charitable Gift Annuity is usually distributed to your charity.

The Charitable Remainder Trust is more flexible in its design because an attorney sets it up to your specifications. The assets could be held at a brokerage house, trust company, mutual fund or elsewhere.

This is just a brief description of the possibilities. You should discuss these matters with your financial planner, attorney, tax adviser, family, friends and anyone else appropriate.

Receiving is nice, but once you have enough, it may be time to give back to those who have either helped you or the charity of your choice.

This story was originally published December 11, 2017 at 1:01 PM with the headline "Investor’s column: How we give can speak volumes."