Legacy planning is a more comprehensive form of estate planning that can include a conscious effort to craft the way that you are remembered after you are gone. Philanthropic efforts can be part of the equation, and it can certainly be satisfying to set aside resources for the benefit of worthy causes and/or institutions. There are a few different ways to go about it, and the creation of a family foundation is one option.
Everyone has heard of high-profile foundations like the Bill and Melinda Gates Foundation, the Ford Foundation, the Rockefeller Foundation, the Walton Family Foundation, and others. This can lead to believe that you must be a billionaire to be able to afford to establish a family foundation. In fact, this is not the case at all. There are more than over 90,000 private foundations in the United States, and according to the IRS, over 60 percent of them have less than $1 million in total assets.
The satisfaction that comes with helping others is one benefit, but there are others. When you establish a family foundation, you get a current-year tax deduction, and you retain full legal control of the actions of the entity. The foundation can employ members of your family, and they can be reimbursed for all expenses that are incurred while they are conducting foundation-related business.
Donor Advised Funds
A family foundation can be the right choice for many people with philanthropic urges, but donor advised funds are also very popular because of the efficiency they provide. The administration is streamlined, because the costs are shared among multiple different people contributing into a given fund.
You as the donor make recommendations regarding the charities that you would like to support. In the end you may wind up supporting multiple charities, but you would be doing so in an efficient manner because you would be only dealing with the fund rather than all these different organizations.
Tax efficiency is gained because you reduce the taxable value of your estate when you make a contribution. You can take a charitable deduction for the year a contribution is made even if no grants are endowed during that year. And, if you donate appreciated securities, they are not subject to the capital gains tax.
Contact Carroll Troberman Today!
We are here to help if you would like to discuss charitable giving and your other legacy goals with one of our licensed estate planning attorneys. You can schedule a consultation right now if you give us a call at 512-478-3800, and you can alternately reach out through the contact page on this website.