There are various reasons why people are interested in philanthropic efforts when they are engaged in the process of estate planning, and in many cases they intersect.
Obviously it can make you feel good on a personal level to think that you are actually doing some good for others in a general sense and of course some individuals are passionate about a certain cause or institution for personal reasons.
And truth be told, there can be tax advantages that go along with acts of charitable giving, and this sometimes serves as motivation as well.
The creation of a charitable family foundation is possible, but for the vast majority of individuals it is really not practical, and this would include many people who have significant resources. There is a lot of overhead involved, and if the point is to support the charitable cause or causes you want to see as much money as possible utilized by the charity directly.
Donor advised funds are a more universally appropriate vehicle of charitable giving. They are efficient because you can advise the fund to endow grants to numerous different charities after making a single contribution into the fund.
Because you are dealing with just the one entity your accounting is simplified, and administrative costs are kept low because many different donors share the infrastructure expenses.
And yes, there are tax advantages to be had when you place assets into a donor advised fund.
Giving to worthy causes can certainly be a meaningful part of your legacy. To discuss your options in detail with an expert, simply take a moment to pick up the phone to arrange for a consultation with a licensed and experienced Mentor OH estate planning lawyer.
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