Shhhhh! Don't Tell Anyone But....

Shhhhh! Don't Tell Anyone But....

Article posted in Pooled Income Fund on 1 November 2017| comments
audience: National Publication, Two Hawks Consulting, LLC | last updated: 1 November 2017


No matter where I go and speak in the country, when I ask the audience of advisors or charities "who's looking at Pooled Income Funds?", no hands go up. Crazy? I think so. Read on...

…the best kept secret in planning has been around since 1969. A strategy that completely eliminates capital gains tax, provides a gigantic income tax deduction, distributes all its income (maybe for three generations), and is completely legal. Sound too good to be true? Not this time.

The lowly Pooled Income Fund, created in code section §642(c)(5) in 1969 and long the red headed step child of planned giving tools, has gone “beast mode.”

The perfect storm of low interest rates, technology, and a few charities who understand the need to be responsive to professional advisors and donors has spawned the Total Return Pooled Income Fund (TRPIF) – the most flexible, powerful and thought-provoking planning tools advisors can deploy. And yet no one knows about it.

Long the sleepy providence of hospitals and universities who were only willing to accept cash and appreciated stock as gifts, only accept donors age sixty-five and older, only allow income for one generation, pay out only their interest, dividends, rents and royalties – while insisting on sending your funds to their institutional money manager only to provide low returns and high residuals, when 100% of your funds remained with them when the donor died.

It’s a totally different universe with the current TRPIF: Gifts of cash, publicly traded stock, closely held C Corps, unleveraged real estate, tangible personal property like art, cars, antiques and LLC interests can be gifted; income can be paid for one, two or three generations of income beneficiaries if they’re alive at the time of the gift; TRPIFs payout all rents, royalties dividends and interest as well as all short-term gains and up to fifty percent of post gift realized long term gains. Charitable beneficiaries are decided on by the donor, not the TRPIF trustee, so the donation goes to whatever charities the family decides on. And if you’re the family’s advisor, the TRPIF allows you to continue managing their money – an opportunity to keep AUM (assets under management) for multiple generations.

If you know a little bit about Charitable Remainder Trusts (CRTs), TRPIFs are similar. However, there are a few differences that are important to note. No, the donor cannot be the trustee of his/her TRPIF as they can with a CRT. That may be a drawback for some, but young donors (couples in their 40s) can’t even qualify for a CRT. And with the many other advantages of the TRPIF, you shouldn’t overlook them – such as tax deductions greater than CRTs by a magnitude of four or five times.

Unconvinced about the TRPIF? Its probably for the best. With all those clients out there that don’t know about them – it just leaves more for me.

Give me a call at (704) 698-4055 or email me at for more information on how charitable planning can benefit your clients.

Add comment

Login or register to post comments


Group details



This group offers an RSS feed.
7520 Rates:  October 3.4%  September 3.4%  August 3.4%

Already a member?

Learn, Share, Gain Insight, Connect, Advance

Join Today For Free!

Join the PGDC community and…

  • Learn through thousands of pages of content, newsletters and forums
  • Share by commenting on and rating content, answering questions in the forums, and writing
  • Gain insight into other disciplines in the field
  • Connect – Interact – Grow
  • Opt-in to Include your profile in our searchable national directory. By default, your identity is protected

…Market yourself to a growing industry