“Shell funds” for charitable clients who plan ahead
Working with clients who are looking to finalize their estate plans? GCF can help you with your clients’ long-term charitable giving plans by putting in place the structures to receive bequests decades from now.
Adjusting Charitable Bequests: A Common Story at GCF
You might have a client who would like to leave bequests to multiple charitable organizations, but the identity of those specific organizations may be a moving target over the years because of the client’s evolving level of engagement with various charities as a donor, volunteer or board member. This client likely will want to make small changes to the estate plan’s provisions for charitable giving but leave everything else as is.
For example, a client’s trust could be drafted to provide that 10% of the remaining estate be divided equally among five charities, which of course could be listed in the trust document. But what if, a few years from now, the client wants to add another charity to that list? Even a small change like this would require an amendment, which can be time-consuming for both the attorney and client.
Instead, your client’s trust document could name a fund at GCF as the beneficiary of 10% of the remaining estate with a separate fund agreement created by GCF that lists the charities that will share the 10%. When they want to add new charities or switch out charities from the list, your client can reach out to GCF and execute simple documentation of their updated intent for the fund. This process is fast and simple, and it allows clients to ensure that their bequests remain aligned with their charitable interests.
Many advisors consider a “shell fund” at GCF to be a valuable solution for clients who are charitable, yet do not intend to use a DAF during their lifetime. Waiting to establish a fund as part of their charitable legacy is perfectly fine; GCF can set up a shell, also known as a “future fund,” at no cost to the donor, to sit dormant and receive assets only after the client passes away. Your client can still name the fund whatever they’d like, and the shell fund agreement can be modified any time before the client’s death.
Thanks to the generosity of those who have included GCF in their estate plans, we continue to make grants today that serve the community’s needs. It is our honor to celebrate the legacy of these individuals and families through our Foundation Society, during and after their lifetimes.
