Reviewing Successor Advisor or Disposition PlansSubmitted by American Endowment Foundation on August 23rd, 2023
Most clients periodically review their estate plans with their attorneys and regularly revisit their financial plans with their advisors. While tax, financial, and estate planning are critically important, charitable planning can sometimes inadvertently be less of a priority.
It is very important when donors establish donor-advised fund (DAF) accounts to indicate what they want to do with their account when they are no longer living. While most name successor advisors to continue the accounts, others establish disposition plans to make grants to charities at death or in a certain timeframe after death.
Since there is often a rush to open a DAF account, especially towards year-end, some donors and advisors select an option with the intention of changing it later. Unfortunately, the initial plan remains in place if the change is never made, even though the plan might differ from what the donors truly want.
Consequently, it is important for donors to review their plans occasionally to verify that everything has stayed the same and changes do not need to be made. Fortunately, those donors who have established DAF accounts can easily make changes to their successor advisor or disposition plans should they need to do so.
Some of the reasons why donors do change their plans include:
- One child demonstrates more interest in continuing the parents’ giving strategy, while another has little or no interest in charitable giving.
- Parents and heirs disagree about which causes or charities to support, so some donors select a disposition plan and remove their heirs as the successor advisors
- Some donors may have initially selected a disposition plan but later name their heirs as successor advisors.
- Some causes or charities become more or less important to donors than when they initially opened the DAF account.
- Some donors change their giving timeframe. (i.e. They originally intended to make grants forever, but later decide to limit the timeframe of their giving for a certain number of years after death).
- Some donors divorce, die, or have another life event that causes them to reassess their giving plan that would be enacted upon their death.
Donors decide to fund the DAF additionally during lifetime, with an additional contribution at death, or when it is named as the charitable beneficiary of a retirement account.
AEF encourages donors to discuss these plans with family members so they can work together to achieve the family’s short and long term charitable goals.
Any donors who want to make changes or verify the existing plans are welcome to submit a donor-advised fund change form or contact the AEF Donor Experience Team at firstname.lastname@example.org to schedule an appointment. Please include your Fund ID, Fund name and current contact information. It is also essential to update the successor advisors’ contact information whenever this changes.