Mary Shahian

Giving

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Professional Advisor Corner

Mary Shahian, partner and senior client advisor at Daintree Advisors, says now is an ideal time to use appreciated securities to accomplish your philanthropic goals.

Matthew R. HilleryA charitable gift annuity (CGA) is a great vehicle for someone who would like to make a charitable gift to Harvard Medical School and receive a fixed payment for life. The ideal way to fund the CGA is to transfer appreciated securities, although cash can also be used. Donating stock or mutual fund shares eliminates any capital gains tax as long as the asset has been held for at least one year. The donor receives a charitable deduction in the year the gift is made.

Donors can choose to receive the fixed income payments now or defer the fixed annuity payment until a future point in time. By deferring the payments, the donor receives a slightly higher rate. This flexible arrangement is ideal for someone who wants to fund a CGA today with a highly appreciated asset but schedule payments at the start of retirement.

With the stock market up considerably since the market low in March 2009, this is an ideal time to take some profits as well as take some risk out of your portfolio by donating appreciated securities. For those individuals who need to rebalance a concentrated position in a given security, this is also an advantageous way to make a gift.

Some investors will hold concentrated positions because of an emotional attachment to the stock—perhaps the stock was a legacy gift from a beloved family member or perhaps it is a stock that has done extremely well or has come from an employer retirement plan. Why not create your own legacy by donating a portion of that position to a CGA?

With a CGA, an individual or couple can receive guaranteed income for life, feel good about making a gift to Harvard Medical School, and benefit from a tax deduction for the charitable portion of the gift—a triple play! And you make a difference by designating your gift to an area of medical scholarship or medical research that is most important to you.