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After I got into the Charitable Remainder Trust and the pooled income fund within that trust, I contributed Gap, Inc. stock to a pooled fund set up within my account but with joint beneficiaries of my wife's brother and his wife. The stock was from a joint account for my wife and me. The charitable portion of the stock contribution is based on life expectancies of the two beneficiaries and worked out to about 26.5% of the contribution. (Fidelity will give this information before you do any transfers.) We thus contributed sufficent stock so that the remainder (73.5%) of the contribution when added to other gifts we had given, including direct gifts of stock, did not exceed $40,000 which is what the two of us can give to the two of them without tax consequences in a single year.

This year we did the same for my brother and his wife in another pooled fund account, and we added a similar amount to my wife's brother and his wife's account. Since these are part of our Trust, we get the benefit of the charitable gift portion, and eventually the value of the pooled funds will return to our Gift Trust.

Giving $10,000 worth of stock saved me capitol gains taxes of $2000 (used to be 28%) and gives me another $2650 of deductions for taxes (that rate is 28%+). Because Gap has been so good for me I have been diversifying as fast as I can, and this works great. Our brothers are 71 years old so this adds to their retirement incomes. We also contribute to our own pooled fund. Goal is to have charitable contributions near 30% of AGI. Started planning gifts on alternate years so could use standard deduction on other years but Gap grows too fast.

The pooled income fund's returns since inception (12/7/94) are 6.3% in income plus 6.55% in growth for a total of 12.84% per year (data as of 6/30/98). The funds are: Fidelity Fund (5%), Spartan High Income (10%), U.S.Bond Index Fund (40%), Equity Income Fund (15%) and Spartan Short Term Bond (30%). The emphasis is income of course.

The Unitrust problem was a situation where I gave Gap stock at about $58 a share with instructions to diversify into specific areas. For more than a year I asked, wrote, called, etc. to get details. Over a year later I was notifed that the portfolio had "dropped" in value so payments would be much smaller. After that, they finally sold the Gap stock at about $23. They had never diversified. We settled at a loss to both. There were no tax problems there.

Dispersement of funds from the Charitable Trust are handled by us while we are alive, and someone we designate (or by will) for after we are gone. Works great for various groups we support, and in cases of Colleges or Cultural groups (Local Orchestra, PBS, Library, etc.) my previous employer provides matching gifts.

Hope this helps. Ask if you have more questions. Good luck.

gapfan :-)
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