Is Creating a Family Foundation Right for You?
When the Charlotte estate planning lawyers at Arnold & Smith, PLLC meet with our clients, we take the time to understand their goals and needs. In some cases, we will recommend that they create a private family foundation. There are numerous benefits to creating a private family foundation. When you set up a family foundation, you will have control of the foundation and its assets. A family foundation can control assets for multiple generations and allow you to continue your charitable work even after you are gone.
A private foundation, or family foundation, is a non-profit entity that may be controlled by a family. It is created when you place money or assets into the foundation for the purpose of charity, education, religion, science, or literary endeavors. The assets are then invested and, rather than making a one-time donation of an asset, you decide which charities will receive your investment income. By donating investment income, you ensure that you can make many more donations throughout the foundations life.
Below we discuss some of the many benefits of starting a family foundation.A Family Foundation Allows You to Engage in Philanthropy
Many of our clients with significant assets want to give back to the community after they are gone. Creating a last will and testament and appointing a charity as a beneficiary of your assets is one way to give back. However, once you transfer the assets to your beneficiary, your philanthropy essentially stops. When you create a family foundation, your assets will continue to provide funding for philanthropic causes for many generations. Rockefeller and Carnegie are well known for their philanthropic legacies and their financial accomplishments in the oil and steel industries. Their family foundations continue to give back to the community through endowments that create investment revenue. This investment revenue will ensure that your foundation can give more over time than you could give by merely cutting a check for a charitable organization as a one-time gift.A Family Foundation Will Allow You to Give for Generations
Creating a family foundation allows you to give back to the community for generations after you are gone. Knowing that your assets will continue to bless other people long after you are gone is incredibly fulfilling. Creating a family foundation allows you to involve the next generation in your philanthropy and work together. Many families live geographically apart now. Allowing your family members to participate in the family foundation can help you connect through working for an important cause.
Private foundations allow families to carry out their charitable efforts directly by using funds in the foundation to pay for philanthropic efforts, such as distributing food aid or building community health centers. In addition to managing charitable projects, family foundations can make donations to other established charities. Family members become vested with the responsibility of managing the day-to-day activities of the family foundation. When you create a family foundation, you are in charge of the scope of the foundation. You can determine whether you would like to give the managing family members significant flexibility when it comes to projects. Or you can limit the scope of philanthropic endeavors to a small list of goals, such as community health projects or helping disaster relief. Your attorney can help you create a family foundation that achieves your unique vision and last for generations.A Family Foundation Allows Younger Generations to Become Involved
When you create a family foundation, you will provide the younger generation the opportunity to develop practical skills. They can take on roles within the foundation and learn how to manage investments, negotiate, and provide leadership. Even younger children can participate in the family foundation, and as they get older, they can play a larger role in running its operations. Many people who have created family foundations appreciate the fact that their foundation allows their younger children to give back to the community, in addition to receiving an inheritance. By allowing younger generations to participate in the family foundation, you can help promote your foundation’s longevity. If you would like to see your foundation thrive for generations to come, it is essential to get your grandchildren and great-grandchildren engaged in the foundation’s charity work now.Contact a Charlotte Estate Planning Lawyer Today
If you are considering creating a family foundation, Arnold & Smith, PLLC is here to help you. After listening carefully to your financial goals and vision for your philanthropic giving, we will work with you to create a family foundation. Contact our Charlotte, Mooresville, and Monroe law firm today to schedule your initial consultation.