To leave a lasting impact and expand philanthropy beyond your lifetime, a Legacy Fund continues to be a powerful charitable giving option. Many donors are now choosing this path as they transition from achieving personal success to making a lasting significance.

A Legacy Fund is a donor-advised fund (DAF) that allows charitable donations to continue long after the fund is established. These funds are typically funded after the donor’s death, ensuring the philanthropic vision is sustained.

When Is the Right Time to Discuss Legacy Funds with a Donor?

Here are some key moments when it makes sense to bring up this charitable giving option with a donor:

  1. They wish to name the DAF as an IRA beneficiary
  2. They’re hesitant about donating too much during their lifetime, usually due to uncertainty around their cost-of-living expenses
  3. They want to actively engage heirs in charitable planning
  4. They prefer to remain anonymous in their giving or wish to keep their wealth private
  5. They support several charities and would like to have a disposition plan for their charitable assets
  6. They want full flexibility without fees in case their estate plan changes
  7. They intend to wind down their private foundation upon their death, offering heirs a simpler option

Why Legacy Funds Benefit Advisors

For advisors, Legacy Funds open doors towards new growth opportunities and help retain assets under management (AUM). Encouraging clients to start thinking about giving to charity creates opportunities for advisors to:

  1. Strengthen relationships with the next generation of the client’s family
  2. Continue managing charitable assets after the client’s death
  3. Offer a simple, streamlined way for clients to create charitable impact

If a Legacy Fund seems like the right option, AEF can accept a wide range of assets, including cash, securities, real estate, or a life insurance policy.

Incorporating a Legacy Fund into an Estate Plan

When it comes to a Legacy Fund being part of an estate plan, assets can be transferred via bequest.

However, some donors who expect to fund their Legacy Fund after their death have decided to fund during their lifetime as well. That’s because they decided to experience their impact while they’re alive, wanted to engage heirs in charitable activities, or wanted to receive recognition from the charities they supported.

Regardless of when or how, the charitable impact will be felt. And it starts with opening a Legacy Fund.

To open one, advisors should complete a DAF application on AEF’s Partner Gateway, checking “Legacy Fund” as part of the process. Then, advisors can contribute assets to it when the client is ready: fees are not assessed until the account is funded.

If anything changes in the Legacy Fund, simply reach out to AEF.

For now, if you need more information about DAFs or future giving, please contact us or call 1-888-966-8170 with any questions.