Easy & Tax-Savvy Option for Estate Planning Attorneys

Amy Jordan |

If you are an estate planning attorney, you know how important it is to keep wills and trusts current and in line with your clients’ intentions. And if you are an accountant or a financial advisor, you are always looking for easy and tax-savvy ways for clients to improve their financial situation.

Hudson Community Foundation (HCF) has the solution, a donor-advised fund. The team at HCF works with attorneys, accountants, and financial advisors–often behind the scenes–to help structure charitable giving plans that are easy, flexible, and effective.

When a client executes estate planning documents, frequently the will or trust will provide for bequests to favorite charities. Indeed, more than $43 billion nationwide flowed to charitable organizations through bequests in 2022.

What is challenging, though, is when a client wants to make minor changes to an estate plan’s provisions for charitable giving but leave everything else as is. For example, a client’s trust may provide that 10% of the remaining estate be divided equally among five charities, which they list in the trust. What if the client wants to add another charity to that list? Even a minor change like this would require an amendment, which can be time-consuming for both the estate planning attorney and the client.

Instead, the client’s trust could name a fund, such as a donor-advised fund, at HCF as the beneficiary of 10% of the estate. Then, the client can work with HCF to identify a list of the charities that will share the 10%. When the client wants to add new charities or switch out charities from the list, the client can simply reach out to the community foundation and execute simple documentation of the client’s updated intent. This process is fast and simple, and it allows clients to ensure that their bequests are in line with ever-changing needs in the community and the charities important to them.

This structure makes it easy for a client’s accountants and financial advisors, too, because frequently the client can make just a handful of gifts (ideally, of appreciated stock) into a fund at HCF to carry out their annual giving to charities. The support of individual charities from that fund is documented in the HCF’s system, but for tax purposes, only the small number of tax-deductible transfers into the fund need to be reflected in the client’s tax filings.

Contact us to learn more about how we can help you incorporate much-needed charitable giving flexibility into your clients’ estate plans. Helping you serve your clients in the best way possible is our goal.

We welcome conversations to help donors give to their favorite causes. Hudson Community Foundation enables simple, smart, and meaningful family philanthropy. Although HCF is a public charity, it does not promote one charitable cause. Rather, HCF is committed to expanding the capacity of family philanthropy - no matter where you live.

Read more about Donors Guide to Donor Advised Funds.

With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on their preferred platform at any amountAssets stay under your management. You can provide your clients with the consistent investment advice they expect. We are your partner in charitable giving!

The team at HCF is a resource as you serve your philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as you manage the primary relationship with your clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.