The Benefits of a “Foundation Lite”
You don't need a highly qualified estate planning attorney to know that you worked hard for your money. If you have a significant amount of assets, whether financial or otherwise, they are often the byproduct of a very focused and very productive life. However, more often these days, affluent clients are looking to leave behind a legacy that is more meaningful and lasting than just their assets. For that, the assistance of a qualified estate planning attorney who understands your needs can be crucial.
Often, we are given the choice between passing on a bunch of money in the form of trusts and other financial instruments or passing on our core values, as well as the knowledge and deeply held beliefs that made us what we became. There are ways for us to pass on who we are, as well as what we have, and help our heirs live meaningful lives, and a highly qualified estate-planning attorney can help you do that, by using a donor-advised fund to set up what has come to be called a "foundation lite."
In a "foundation lite," you and your heirs are named as board members while you're still alive, thus getting everyone, from spouses to children to great-grandchildren, or even nieces and nephews or other potential beneficiaries, involved with long-term charitable giving as part of the estate planning process. That way, younger generations of your family will hopefully be able to carry on your core values. You can even incentivize their participation, by linking their participation in the fund's main mission to their eventual inheritance.
Through a "foundation lite," you will have an excellent opportunity to build stronger relationships with your heirs, and get them involved in something you feel strongly about, making them more likely to carry on the family legacy you are building.
Because such a donor-advised fund is yours and yours alone, these funds are relatively easy to establish for as little as $10,000 and without having to file a lot of extra paperwork; you don't even necessarily have to file a separate tax return. Since it is informal, the "board" actually has no legal authority or responsibility, because ultimately the fund's owner makes all of the fund's decisions. However, such a fund could go a long way toward teaching your heirs strong values.
Consider that the fund's goals should be clearly defined, but broad enough to allow younger "board members" to feel like active participants. Often, fund owners support very specific causes with which the family has personal experience, and where they would like to make a difference with their charitable contributions. For example, if a family member died of cancer, then finding a cure might be a great way to start. Then, as life goes on, that can grow and change from there. It will eventually become too important for them to give up when you pass away.
As part of the estate planning process, setting up a "foundation lite" is a great way of creating something more lasting than just leaving assets. You could end up leaving something much more important; lasting values.