How Do Donor-Advised Funds Help with Charitable Giving During Divorce in California?
Posted on Oct 17, 2022 3:30pm PDT
According to Yahoo! News, MacKenzie Scott, billionaire philanthropist,
recently donated $20 million to the Fresno Unified School District (FUSD). Scott is the ex-wife of Amazon founder Jeff Bezos. Since their divorce,
Scott has been regularly donating portions of her wealth to charity.
The FUSD donation comes in the aftermath of Scott announcing that she and
her second husband, Dan Jewett, are
getting divorced. It is unclear whether the timing of the donation has anything to do with
her divorce. It is also not clear whether Scott made the donation using
a donor-advised fund (DAF). If she did, it could be a sign that her and
her ex are on the same page as far as continuing to contribute to their
favorite charities during the divorce process.
What Is a Donor-Advised Fund?
A donor-advised fund is an investment account that is set up to specifically
support charitable organizations that are most important to the donor.
Donors can contribute more than just cash to a DAF. They can contribute
securities and other assets as well. Plus, contributions to donor-advised
funds are immediately tax deductible. In addition, the funds in a DAF
can be invested for growth or directed to nearly any IRS-qualified charity.
In the case of divorce, a couple who was passionate about charitable giving
can split a single donor-advised fund into two separate DAF accounts rather
easily. This enables them to continue giving to the charities of their
choice on their own terms. If the couple didn’t share any donor-advised
fund accounts prior to filing for divorce, they can still create DAF accounts
to divide the assets they have set aside for charitable giving evenly
between the separate accounts.
Donor-advised funds are one of many options available to divorcing couples
who are searching for ways to best continue giving to their favorite charities
during the divorce process as well as once their divorce is finalized.
This issue isn’t just important for those involved in
high-net worth divorces but for divorcing couples of all financial levels.
Need help figuring out how charitable giving works during the divorce process
in California? Our experienced divorce attorneys in Fresno
can help. Contact Arnold Law Group, APC
or call us at (559) 900-1263 to set up a confidential consultation with our legal team.