A client contacted us and asked: “What is a family foundation, and should I have one?” This isn't the first time the question has come up, so I wanted to share our answer.
A family foundation is a way to obtain a charitable income tax deduction today while distributing the money to charities in the future. It is a not-for-profit organization that holds funds and then disburses those funds to charitable organizations. They are recognized as 501(c)(3) organizations and the person contributing to the foundation is allowed a charitable deduction when the property is transferred into the foundation. (There are limits on the amount that can be deducted.) So, someone puts their money into the foundation, and then the foundation distributes it to charities.
Should you have one? It depends....Read More