Just last summer, two of the most high profile businessmen of our time, billionaires Bill Gates and Warren Buffett, challenged the nation’s richest individuals to give away at least half of their wealth to charity over the course of their lives. Indeed, Buffett himself has already given billions to the Bill and Melinda Gates Foundation so he’s certainly walking the walk. Without question, need exists on many different levels and this type of philanthropy can make a very positive impact.
Of course, few of us are in a position to start a family foundation due to the significant costs involved, but that does not mean that you cannot make charitable giving part of your estate plan. If you want to give something back there are ways that it can be done in an efficient manner, and you can even gain some tax advantages in the process through the use of donor advised funds.
Donor advised funds are charitable giving vehicles that are housed within public charities and some major commercial brokerages. When you donate assets to a donor advised fund, the fund assumes ownership of the assets, and you as the donor can make recommendations with regard to the charities that are to receive grants from the fund. Depending on the value of the donated assets and your income, you may be eligibile for an immediate charitable income tax deduction.
Another tax advantage is that appreciated securities are not subject to capital gains tax upon contribution to the fund. Plus, donor advised funds afford you the opportunity to contribute to multiple charitable organizations with a single donation to the fund.
Michael Robinson, Estate Planning Attorney
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