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Here are answers to common questions on how to include a charitable giving fund in your estate plan.

Estate planning and philanthropy often go hand in hand. According to a 2021 planned giving report by FreeWill, 19% of its users included charitable bequests in their wills, with an average of $41,000 per will-maker.

When determining how you would like to divide your assets after you pass, it's a great idea to consider what role you would like philanthropy to play in your legacy. One of the best ways to carry out your giving both now, and in the future, is through a donor advised fund (DAF).

A DAF is a flexible and efficient way to organize your charitable giving to impact your community. Here are answers to a few questions many donors have about how to successfully make a DAF part of a long-term giving and estate plan.

Can a donor advised fund last forever?

No, but it can be used as a vehicle to maximize your charitable giving both during and after your lifetime.

As part of your estate plan, you can appoint family members such as a spouse and children, or a family friend, to work with you and your advisor. These individuals can be involved in your initial giving plan, take over after you pass or be named a beneficiary to advise the fund upon your death.

At the Saint Paul & Minnesota Foundation, we typically work with up to two generations of donors. For Christine Noonan, giving is a family tradition. Inspired by her parents George and Judy, Christine and her husband opened a DAF with the Saint Paul & Minnesota Foundation where they carry on the practice of giving with their children, allowing them to specifically choose the organizations they want to support.

A donor advised fund usually lasts until funds are depleted. After your passing, the Foundation will work with your designated advisor to continue making grants from your fund until the last listed advisor on the fund dies.

Can a donor advised fund be part of an estate?

If a DAF isn’t already part of your estate, here’s why it should be. When you leave a DAF in your estate plan, it can often financially benefit both you and the organizations you choose to support, by providing you income or significant tax benefits during your lifetime.

Based on what you want to do with your assets, you can allocate a certain percentage to be left to family, multiple organizations or your favorite cause.

If you already have a DAF, when you pass, those assets can be allocated to a designated fund, unrestricted or restricted fund. This allows for the fund to continue carrying on your philanthropic mission.

For example, Louise created a legacy donor advised fund (a designated fund that gives in her name) where she plans to donate all of her assets as part of her estate plan. With the support of the executive of Louise’s estate, after her death the Foundation can continue supporting all of the causes she cared about during her lifetime, with little change.

A DAF can be funded in multiple ways, including with non-cash assets. These assets can include items such as real estate, private stock, charitable gift annuities, retirement assets, life insurance and more.

A donor advised fund can maximize your charitable giving both during and after your lifetime. A legacy donor advised fund can continue supporting the causes you care about for years to come.

What happens to a donor advised fund after death?

After death, your DAF can continue carrying on your charitable giving legacy. As stated before, your DAF can be passed on to family or a close friend for them to advise, or even divided to make multiple DAF accounts for each successor.

Based on the assets in your fund, our philanthropic advisors can explore different options. For example, if you have $75,000 in your fund at the Foundation and have three children, you can break the assets up into $25,000 increments per successor and create three new donor advised funds.

At the Foundation, we work with your successor advisors before they have responsibility for the fund, to ensure that they are familiar with the fund and your goals. With your permission, we can also support them on their giving journey. Foundation donors Sally and Karen started early with their two young sons, asking the boys to participate in family giving decisions. Sydney decided to have her neighbor Mary advise her fund after she died. Mary continues to carry on Sydney’s legacy and love for babies by providing funding to the neonatal intensive care unit (NICU) at M Health Fairview St. John’s Hospital in Maplewood.

Can a donor advised fund be a beneficiary?

Yes. You may have heard of naming a charitable organization as beneficiary. At the Foundation you can name your DAF as a beneficiary in your estate plan through your will, life insurance or charitable remainder trust. This makes it easier for your designated trustee to carry out your wishes. This also allows you the ability to effortlessly change and adjust how your assets are distributed after your death, especially if you want to give funds to multiple organizations.

To learn more about DAFs, contact one of our gift planners or read stories about how DAFs have benefited some of the Foundation’s fundholders.

The Saint Paul & Minnesota Foundation does not provide tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors regarding your individual situation before engaging in any transaction.

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