November 2015 Connections Newsletter

Issue #1115  
The American College of Financial ServicesĀ® Connections
End of Year Gift Planning
As we approach the end of the year, financial advisors have an opportunity to engage our clients and complete year-end adjustments to maximize financial and tax planning. One aspect of year-end financial and tax planning is to review with our clients what gift planning arrangements may be of interest to and beneficial for our clients. Many of our clients have deep philanthropic desires and this offers a window of dialogue with them to achieve their philanthropic goals. It also helps us build a more complete relationship with our clients.

Now is a perfect time to open discussions with your clients if they have any special gifts they would like to make. Some gift arrangements may provide current charitable income tax deductions while others may not. There are many different gift arrangements to consider. I’ll focus on just a couple.
Charitable Gifts
Funding a charitable gift arrangement with significantly appreciated assets is a
well-considered option. So, your client may have stocks with long-term (12 months or more) appreciation. Transferring the appreciated stock to a charitable organization to fund a gift arrangement will avoid any capital gains taxation. Your client will be entitled to a current charitable income tax deduction for the full market value of the assets given. Your client will fulfill an
important philanthropic goal.
Charitable Remainder Unit Trust
Let’s also consider such a gift with an added dimension. Your client establishes a charitable remainder unit trust (CRUT). The CRUT provides annual income to your client and at the termination of the trust, the corpus is distributed to one or more charitable remainder beneficiaries. Your client deposits the same appreciated stock into the CRUT. The CRUT pays an annual return of say 5-6% to your client. Transferring the appreciated stock to the CRUT will avoid any capital gains taxation. Your client will be entitled to a current charitable income tax deduction equal to the full market value of the assets so deposited less the value of the life income estate. Most importantly, your client now has a new, diverse, dependable source of annual income. Your client will fulfill an important philanthropic goal.

Donor Advised Fund
Another popular option is to have your client establish a donor advised fund (DAF) within a charitable institution. There are numerous charitable organizations who manage DAFs. In fact, any charitable organization may establish and manage DAFs. Your donor will establish a DAF at a charitable organization. When your client deposits funds into the DAF, he/she is entitled to a current charitable income tax deduction for the value of the assets deposited. At a subsequent time, your client may request the DAF to distribute funds to other charitable organizations.

These are just a couple of simple illustrations to use in gift planning arrangements. The philanthropic discussion is one that you should engage your clients with. You will be surprised at the positive responses you will receive. Your clients will thank you and you will be building a closer relationship with them. So, have the philanthropic conversation with them.
Make Your Gift Today

The American College MassMutual Center for Special Needs Hosts Panel Discussion on Alzheimer's and Retirement
  Earlier this month, in recognition of Alzheimer’s Awareness Month, The American College MassMutual Center for Special Needs hosted a panel discussion on the impact of Alzheimer’s Disease on retirement planning. Three experts participated in the panel, bringing insight from clinical, legal, and financial planning perspectives.

Panelists included Dr. Valerie Cotter, Director of the Adult-Gerontology Primary Care Nurse Practitioner Program at the University of Pennsylvania School of Nursing; Bruce Sham, Special Care Planner with the First Financial Group in Bala Cynwyd, PA; and Mark Freeman, Esq., an elder law attorney who specializes in nursing home issues. The panel was moderated by Professor Adam Beck, Director of The American College MassMutual Center for Special Needs.

“This month, we focus on Alzheimer’s, a condition that affects more than 6% of those over age 65 and the leading cause of dementia. It completely alters one’s golden years and therefore their retirement plans, as well as the plans their spouse may have had. It’s important for families who are affected to be thinking about this and for financial advisers to be aware of the concerns that many of their clients may have,” said Beck.

The Center for Special Needs is the newest Center of Excellence at The American College of Financial Services. Funded by the MassMutual Financial Group, the Center was established in January 2015 and strives to be the nation's leading voice in financial planning for special needs families.
Visit the MassMutual Center for Special Needs

Women's Crisis
  Saving for retirement is an important planning goal for most adults, especially women. The “bag lady syndrome” (the fear of running out of money) is a common concern of many women, even successful, high-income earners. According to the National Institute on Retirement Security, the retirement gap (the difference between savings and needs) ranges from a low of $6.8 trillion to as high as $14 trillion. Not surprisingly, women lag far behind men. In fact, a report recently released by Financial Finasse, revealed that of the amount needed for a 45 year-old to retire at age 65 on 70% of their pre-retirement income the shortfall for men and women was $270,000 and $522,000, respectively.

Sallie Krawcheck, Ellevate Network, stated in a speech to the American Council of Life Insurers, “It is, in particular, a women’s crisis. It’s a gender crisis.” When it comes to retirement savings we know that, in general, women–live longer, earn less and spend more time out of the workforce to care for children and loved ones–resulting in fewer assets saved for retirement. This presents a significant planning opportunity for the financial services industry.

For information on how to address these concerns, stay tuned for the release of The American College State Farm Center for Women and Financial Service’s latest white paper which will offer insights to financial services professionals on how to focus on the needs of women across generations and provide guidance on how to specifically target communications, education and products.
Visit the State FarmĀ® Center for Women & Financial Services

Video of the Month
  View the archive of Techniques and Strategies for Creating a Retirement Income You Can Live With which was co-produced in partnership by the Society for Financial Services Professionals and The American College and sponsored by Pacific Life.
The event discuses what income tools are available to construct a sound retirement income strategy, how investment strategies change from accumulation to income distribution, health and tax risks that affect income decisions, and more.
View the Archived Webcast

Video of the Month
  Every month in Connections, we will be showcasing a video from our
YouTube channel. In the video below, Kevin Lynch, Assistant Professor of
Insurance, discusses estate planning 101 with Michael McLane from
Professional Economic Growth Group.
Video of the Month

The American College Featured in Leading Publications!
The American College in USA Today, The Washington Post, and more!
Forbes - The State Of 'File And Suspend': Where The New
Social Security Rules Leave Seniors

Investment News - Loosening Mortgage Standards Entails Risks
The Wall Street Journal - Tuition Due? Time to Hit Up Everyone You Know
Forbes - Keep Social Security Changes In Perspective
News & Events

Alumna of
The Month

Alison Pettine

Alison Pettine,

Read more

Upcoming Events

•  Knowledge Summit will take place from Thursday - Saturday, November 9-11, 2017. If you would like more information on Knowledge Summit 2017 in the Bahamas, please email us at:
•  Partnering to Perform: Monday, November 30, 2015 in New York, NY - Register Now.


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