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How to Use a Donor Advised Fund in Estate Planning?

Giving to charity through your estate plan is an excellent way to leave a legacy with your resources and assets. There are many approaches to charitable giving, and one of the easiest is setting up a donor advised fund (DAF).

The structure of a DAF is simple; you set it up with your community foundation or as a charitable trust with a financial adviser, and then decide how you want funds distributed and to which charities. The next step is to make the DAF a beneficiary of a trust in your estate plan, and you can choose whether the DAF will receive all or part of your estate.

Why use a DAF instead of Naming Charities as a Beneficiary of your Estate?
One of the benefits of using a DAF is that you can set it up, include it in your estate, and then decide later which charities to name. You can change the charities at any time, as well as the amounts given, without too many formalities.

This is a great option for those who want to take time to research charities and find out the best way to use the DAF for maximum benefit. This is quite different than making a charitable gift in your trust, which is going to have to list one or more specific charities and amounts, and changing it requires several legal steps.

Any property in your estate can be given to the DAF, including cash, real estate or investments, so it does provide flexibility over listing a single charity as beneficiary, who might not accept certain types of property.

Using the DAF for Active Charitable giving while you are Alive.

The other benefit is that you can also use the DAF while you are alive and be active in overseeing the gifts to charities. This will give you a feel for the impact that your estate will have on the DAF’s giving, and give you the knowledge that your legacy will be well received. Your lifetime gifts to the DAF can be invested and grow tax-free until a grant is made, and the initial gift is tax deductible.

There are other charitable giving vehicles as well, and the one you select will depend on taxation, your heirs and estate value.

If you have questions about estate planning, charitable giving and whether a DAF is right for you, please call the attorneys at Shoup Legal, A Professional Law Corporation at 951-445-4114 or visit their website at

Written by Andrea Shoup

Shoup Legal, A Professional Law Corporation can be reached at (951) 445-4114.

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