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Here are four ways DAFs can streamline estate planning for financial advisors.

By Mariah Brook, Director of Gift Planning

Donor Advised Funds (DAFs) are great tools for your clients to streamline their giving, both now and in the future. One of the many reasons it is the fastest growing charitable tool in American history is because of its ability to simplify estate administration. Here are four benefits of a DAF that you can discuss with your clients:

Flexibility
Give at any time
Simplified administration
Legacy building

Flexibility

Rather than naming individual charitable beneficiaries of a will, trust or financial account – a donor can name their donor advised fund as a single charitable beneficiary. The DAF receives charitable gifts from a donor’s estate and then makes grants to nonprofits in accordance with their recommendations. Those recommendations are outlined in a “fund agreement” created by the donor during their lifetime.

If your clients’ giving plans change, a DAF can accommodate those changes with ease. They can simply update their fund agreement at no cost, without having to alter their will, trust or financial account beneficiary designations.

Give at Any Time

Another benefit to having a DAF is your clients can make grants at their own pace.

Traditional bequests from a will, trust or financial account are one-time gifts made at the time of their passing. A DAF can distribute grants at any time. This provides a steady stream of support to your clients' favorite organizations for generations to come. Over time, those grants can add up to more than they would have given with a one-time gift.

“ If your clients’ giving plans change, a DAF can accommodate those changes with ease.”

Mariah Brook, Director of Gift Planning

Simplified Administration

DAFs also make administration much easier for financial advisors, executors and trustees. When a donor names their DAF as the beneficiary, one check will be issued to the DAF provider for grants to be distributed to individual charitable organizations. See how to help your clients choose a donor advised fund provider.

These bequests can provide both a state and a federal estate tax deduction. The tax benefits of naming a donor advised fund as charitable beneficiary are the same as naming individual nonprofits. This means the executor only needs to track one gift receipt.

Legacy Building

Lastly, your clients can use their DAF to pass on their love of charitable giving.

Family and or friends can be named as successor advisors to a fund. That means they will have the opportunity to decide what organizations they would like to support with the fund. A DAF can be a beautiful way to remember and honor the legacy of a loved one or continue a family tradition of giving.

Download Our Guide to Making Legacy Gifts

Let’s Work Together

Partner with a community foundation like the Saint Paul & Minnesota Foundation to help your clients establish a donor advised fund.

Our experienced team is ready to work with you and your clients to help craft a giving plan that meets their philanthropic and financial goals.

Reach Out Today

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.

As Director of Gift Planning at the Saint Paul & Minnesota Foundation, Mariah Brook helps individuals and families initiate and express their philanthropic plan to maximize their giving. In her role, Mariah also provides nonprofits the support to start and grow their endowments and works alongside professional advisors to help them achieve their client’s philanthropic goals.

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