If you're looking for gift ideas for the holidays, consider something different this year: a certificate that represents a gift of shares of your favorite security. Gift-of-shares certificates are a simple, convenient way to invest in someone's future, and you'll introduce family and friends to the long-term benefit of professional money management. You can contribute toward a down payment on a home, a comfortable retirement, or a college education.

If you want to contribute to a loved one's college education, a 529 college savings account has many advantages over traditional savings accounts. Anyone can gift shares in a 529 account no matter what state they live in, and earnings are tax-exempt. Withdrawals are exempt from federal tax and, in most cases, state tax too, when used to pay for qualified educational expenses like tuition, room and board and required expenses. While account holders may participate in any state's plan, they must use their state's plan to qualify for a state tax deduction or credit. As the account owner, only you and your advisor can make withdrawals. If withdrawals are used for purposes other than higher education, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax.

Gifting shares can also decrease your tax liability by reducing the value of your estate. You can invest up to $14,000 a year, or $28,000 if you are married filing jointly, in a 529 account without paying any federal gift taxes.

Contact Fred for help in selecting a 529 plan, a gifting strategy designed to help accomplish your goal and a 529 account application.