A new way of estate gifting

A new way of estate gifting

Kirsten Harper, Principal at Treadwell Gordon, enjoys talking about estate planning and philanthropy with her clients. “I love the opportunities having these discussions presents. I find many of my clients do want to leave something in their wills for a charitable purpose, however they don’t always know the right vehicle to do this”.

Alongside traditional charity giving, and on occasion talking with clients about setting up their own charitable trusts, increasingly Kirsten has been talking with her clients about a third option – setting up their own trust or endowment fund, to be invested alongside others, with their local Community Foundation.

One couple recently came to her with an idea about setting up a charitable trust to continue on after they had gone. “These were people with significant wealth, who had already provided for their natural beneficiaries, and they wanted to do something that would support a particular vision that they had. They had assumed that the only option would be to set up their own charitable trust”.

“The problem with trusts is that you always have to be forward planning for longevity, and they can have a shelf life that might be remarkably small once the settlors of the trust have died. From a legal perspective, there must be trustees in place and it’s always going to be a challenge to find like-minded people to hold the role of trustees, particularly if the purpose for which the trust was settled is quite specific”.

“I started by saying we could explore the idea of a charitable trust, however they could also consider their own fund with their local Community Foundation. They found it easy to see the positives around perpetuity and longevity of the fund. They liked that the responsibility of managing a trust fund was not going to rest on their shoulders, as the Community Foundation would already have well established structures in place to handle the administration of their funds, and that those structures would endure over time”.

Kirsten says that the couple loved the idea of their trust fund being grown alongside other contributions as well, “It’s a concept, I think, that is greater than the sum of the individual parts, and clients are attracted to that”.

“I felt confident too that this gift was not going to be subject to any family protection claims or testamentary promises claims. The couple’s children were well aware of their plans, and supportive of what their parents wished to do, which is a critical component to this”.

As a farming family, Kirsten explains, they had wanted their fund to have a focus on organics and teaching – the education and support of others who may have similar interests in organic foods. “They want their fund to promote food production from an organic perspective. Giving to a Community Foundation achieves this as it’s a really bespoke form of giving”.

The couple decided to allocate the residue of their estates to the trust fund, which will continue on in perpetuity under the not-for-profit structure and guardianship of their local Community Foundation.

Kirsten says, “it was a great solution for them; they knew what they wanted to do, they just didn’t have the vehicle to do this without advice. And they went away extremely happy that they didn’t have the personal burden of finding the legs for this vision, that they could share this responsibility with a credible organisation which would give due respect to the purpose that underpinned why they wanted to give”.

So what is it that Kirsten likes about the model? “I love that it goes further than the concept of traditional charity giving. It’s flexible and people can fit their desire to give something alongside someone else’s. They might not be the same desire, but they are complementary because they form part of a wider community fund, which will in turn provide grants to worthy recipients”.

“I do find it a relatively easy conversation to have and I do not lead my clients in the least. I am literally saying ‘have you considered this’? It opens up a whole new world of opportunity for some”.