When you are planning your estate you may want to take certain actions that will embody a portion of your legacy. One of these can be the choice to provide for a charitable cause or causes.
While your primary motivation may be purely one of generosity there are in fact tax advantages that go along with setting aside resources for worthy causes.
One decision that you must make is the vehicle of charitable giving that you choose to utilize. Private family foundations are an option, and we have all heard of large foundations such as the Ford Foundation, the Rockefeller Foundation, and the Bill and Melinda Gates Foundation.
Large family foundations are staffed, and there is a considerable amount of overhead. However, many private family foundations are not permanently staffed, and a high percentage of them handle less than $1 million. Therefore, it is indeed possible for someone who is not a billionaire to start a private family foundation.
Another option that you may want to consider would be to contribute assets into a donor advised fund rather than starting your own foundation. These funds already have the mechanism in place to make grants to charitable organizations, including gifts of securities.
You make a single contribution into the fund and you then make recommendations with regard to how these assets are distributed among the various charities that you would like to support.
Because you’re dealing with a single contribution though you may be supporting multiple charities you streamline your accounting processes, and this is part of the appeal.
To learn more about charitable giving and legacy planning simply give us a call at 860-548-1000 to set up a free consultation.