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Turning Your IRA into a Legacy: How a Donor Advised Fund Can Amplify Your Impact

What if your retirement savings could do more than secure your future—what if they could create a lasting impact on the causes and communities you care about? For many families, naming a donor advised fund (DAF) as the beneficiary of an IRA is a purposeful strategy that makes this possible.

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Aligning Wealth with Purpose Through a Donor Advised Fund

A donor advised fund is a charitable account that allows you to contribute assets, recommend grants to nonprofits, and involve family members in philanthropic decision-making. Pairing a DAF with your IRA creates a unique opportunity to align your financial legacy with your values.

What is a Donor Advised Fund?

Think of a donor advised fund as a bridge between your wealth and the causes you care about most. It provides flexibility, simplicity, and the ability to engage others in meaningful giving.

Tax-Efficient Strategies for Your IRA

Traditional IRAs are funded with pre-tax contributions, which means withdrawals are subject to income tax. Leaving an IRA to an individual results in heirs paying ordinary income taxes on distributions. By naming a donor advised fund as your IRA beneficiary, the full value passes tax-free to a charitable vehicle, ensuring that more of your assets directly support the causes that matter most.

Retaining Influence Over Your Charitable Vision

One of the most compelling aspects of this approach is the influence it allows, even after you are gone. You can designate your spouse to manage grant recommendations from the fund, and later involve children or other trusted individuals.

Passing on Philanthropic Leadership to Your Family

This structured succession ensures your philanthropic vision continues while remaining aligned with your family’s values. It becomes less about dollars and cents, and more about stewardship and leadership.

Engaging the Next Generation in Purpose-Driven Giving

Charitable planning isn’t just about financial efficiency—it’s an opportunity to instill values. Involving your children in grant decisions can teach responsibility, generosity, and the power of thoughtful wealth management. Families who embrace this approach create shared experiences that go beyond money and cultivate a culture of giving.

Creating a Lasting Impact on the Causes You Care About

For nonprofits, this strategy extends your influence far beyond your lifetime. A donor advised fund ensures your support continues to empower meaningful initiatives, helping the community thrive while keeping your legacy alive.

The Triple Advantage: Tax Savings, Control, and Family Engagement

In practical terms, this strategy offers three significant benefits:

  • Tax-efficient giving: Maximize the amount of your IRA that goes directly to charitable causes.
  • Influence over grants: Maintain a voice in how your philanthropic dollars are used.
  • Family engagement: Teach the next generation the importance of stewardship and purpose-driven financial planning.

Taking the Next Step in Your Legacy Planning

Naming a donor advised fund as your IRA beneficiary is more than a financial maneuver—it’s a way to translate your values into lasting impact. Connect with the team at Evensky & Katz / Foldes to explore how this approach can fit into your broader estate and philanthropic plans.

Connect with us to discuss how a donor advised fund can enhance your charitable legacy.

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