A Donor-Advised Fund May Pair Perfectly with an Estate Plan
Tax Tip:
Using a donor-advised fund (DAF) is worth considering if charitable giving is high on your estate planning objectives. What’s the main attraction? Among other things, a DAF can give you greater control over your charitable endeavors than direct donations.
A DAF generally requires an initial contribution of at least $5,000. A financial institution or an independent sponsoring organization manages the fund and charges an administrative fee, typically based on a percentage of the assets on deposit.
You instruct the DAF on how to distribute contributions to your preferred charities. While deciding which charities to support, your contributions are invested and potentially grow within the account. Then, the sponsoring organization vets the charitable organizations you choose to ensure they’re qualified to accept DAF funds. Finally, the checks are cut and distributed to the charities.
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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