ken hoffman family photo

Ken Hoffman, a Managing Director and Partner at HSW Advisors / HighTower LLC, has had a JCF fund since 1985. Like many of our donors, charity is a family tradition for Ken, his wife, Janet, and their three children. Ken is also an active volunteer who serves as Chairman of the Finance Committee for the Frisch School in Paramus, N.J.; and a lay leader at their synagogue, Congregation Rinat Yisrael in Teaneck, N.J., where they help support a shadow program for children with special needs. He and his wife focus much of their charitable giving around education and social services causes both in the United States and Israel.

Ken Hoffman, JCF Fund holder
Ken Hoffman, JCF Fund holder

They’ve also inculcated a love of giving into their three grown children. “Since they were little kids, each child would get a certain amount of money each year to give away to charity,” he says. “They would have to do their homework and present their favorite charities to their siblings and parents, explaining what the charity does, and whether it was well-managed.” Each family member has veto power, though it is seldom used.

To ensure that the tradition of giving will continue, Ken created a plan so his children will inherit a JCF donor advised fund that will enable them to honor their parents’ legacy in the future. He and his wife opened a second DAF with the goal of providing additional cash for the charities they care about, while also ensuring that their children will one day inherit without incurring additional estate taxes. It’s a niche strategy that is particularly helpful to wealthy individuals who are charitably inclined and especially useful for those who are subject to gift or estate taxes (couples whose taxable estates are valued at nearly $11 million that can be passed to their heirs gift/estate tax-free).

The strategy, the Charitable Lead Annuity Trust, CLAT, is a trust that promotes legacy planning for both philanthropic interests as well as family, passing assets to the next generation gift and estate tax free without using your lifetime exclusions, and it works especially well in a period of low interest rates.  The objective of the CLAT is to make an ongoing annual payment to charity, and when the trust unwinds, after charity receives their final payment, any principal remaining in the trust is passed to the heirs estate tax free.

The Hoffmans created a lifetime CLAT funded primarily with insurance policies which pre-determines the payments to both charity and his heirs.  In using the Charitable Lead Annuity Trust, Janet and Ken convey the mitzvah of charity to their children, receive immediate income tax relief, leave a legacy for charity, and a tax free inheritance for their heirs.

A fund at JCF serves as the charitable beneficiary of the CLAT, resulting in a wonderful charitable legacy for the Hoffman family. As successors, the power to recommend grants resides in their children’s hands.  For Hoffman, using a donor advised fund makes perfect sense. “The idea of a donor advised fund has always appealed to me—it acts like a bank account for gifting appreciated stock without paying the long-term capital gains tax, and it cuts down on the administrative work.”

JCF’s secure online giving portal makes it easy to be generous, he says. “I love the new website. Pesach just passed, and food is so expensive.  I simply logged online and sent a donation to Tomchei Shabbos of Bergen County and Project Ezrah. It takes three minutes to do it; it’s really convenient.” He also recommends DAFs to his clients. “I find that it helps people organize their charitable giving.”