Planning Your Legacy with Charitable Giving

August 27, 2025

When thinking about your estate plan and the legacy you want to leave, you may consider including charitable organizations or causes that have been meaningful in your life. Many people also hope to inspire their beneficiaries to continue a tradition of giving after they’re gone.

However, deciding how to give beyond your lifetime can feel overwhelming. As Pamela Pirone-Benson, Vice President on Fidelity’s Advanced Planning team, notes, “Individuals often delay signing estate planning documents because they want to include charitable gifts but aren’t sure which charities to choose—or they worry their priorities might change in the future.”

One solution that can address these concerns—and provide both tax advantages and flexibility—is a donor-advised fund (DAF).

What Is a Donor-Advised Fund?

A DAF is a charitable giving account managed by a public charity, often called the sponsoring organization. Contributions to a DAF during your lifetime can qualify for an immediate income tax deduction, and funding a DAF at death may offer estate and inheritance tax benefits as well.

When you include a DAF in your estate plan, you give your loved ones the ability to recommend grants to any IRS-qualified public charity—keeping your philanthropic goals alive for generations.

As Huong Do, Regional Vice President at Fidelity Charitable®, explains, “DAFs offer simplified recordkeeping, strategic flexibility, and potential for tax-free growth on invested contributions, all while giving you the ability to support multiple causes on your terms.”

How a Donor-Advised Fund Supports Legacy Planning

Here are four ways a DAF can help you achieve your long-term charitable and estate planning goals:

1. Flexibility in Updating Your Plans

Instead of listing specific charities in your will or trust, you can name your DAF as the beneficiary of retirement accounts, investment accounts, or even a 401(k). You can also designate it in your legal documents for a dollar amount, percentage, or remainder share.

This approach allows you to change the charities or amounts in your DAF succession plan without revising your estate documents—avoiding unnecessary legal costs.

2. Streamlined Estate Settlement

Naming a DAF as a beneficiary can significantly simplify the estate administration process. Rather than your executor coordinating distributions with multiple charities (each with their own paperwork and requirements), they make one transfer to the DAF—reducing time, complexity, and costs.

3. Continuity for the Next Generation

A DAF provides a way to involve family members in charitable giving after your lifetime. You can name successors—such as children or grandchildren—to recommend future grants, encouraging family philanthropy without the administrative burden of a private foundation.

4. Tax-Efficient Asset Distribution

Charitable gifts can help reduce estate taxes, especially when using highly taxable assets like traditional IRAs. Leaving these assets to a DAF can maximize the impact of your gift while minimizing the tax burden on your heirs.

Next Steps

Now is a great time to review your estate plan and charitable giving strategy. A donor-advised fund can offer flexibility, efficiency, and lasting impact for the causes you care about most. Consult your estate planning attorney and financial professional to explore how a DAF can fit into your overall legacy plan.

Sources:

https://www.fidelity.com/viewpoints/wealth-management/insights/donor-advised-funds

Disclosure:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.

Donor Advised Funds represent an irrevocable gift of assets from the donor to the fund. Contributions made to the fund are irrevocable and cannot be returned or used for any other individual or used for any purpose other than grant making to charities. The gift is not an investment or a security. When evaluating a contribution to the fund, carefully consider the terms and conditions, limitations, charges, and expenses. Depending on the tax filing status, DAF contributions may or may not be tax deductible.