Monthly messages from your friendly Estate Planning Counselor:
What is a Donor Advised Fund?
Donor Advised Funds are growing in popularity. More people are aware of this option for their charitable giving, but other people are still unsure about the details of a Donor Advised Fund (DAF).
Here is a brief summary.
A DAF is created when a donor makes a gift to a public charity, asks the charity to manage the money, and holds advisory privileges as to how the money will be used.
The gift is irrevocable and also tax-deductible. The gift can be given by an individual, a family or a business.
The donor receives a tax benefit in the year of the gift, but distributions from the DAF can be made in subsequent years. A minimum distribution is required each year, but there is no maximum.
What are the advantages of a DAF?
There are many advantages of a DAF including:
The tax benefit of a charitable gift
The flexibility to make distributions from the DAF over many years and to various charities
People who want to exceed the standard deduction for their tax returns can bundle their gifts into one donation and create a DAF for their charitable giving
The initial gift to create a DAF will be invested which creates the possibility of larger charitable gifts beyond the initial donation
If you would like to learn more about DAFs, contact Paul Snamiska (paul.snamiska@kmlhs.org or 262-677-4051 x 1116), or talk to you financial advisor.