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Mark and Sherry Lundberg - Use of Family Foundation

Mark and Sherry Lundberg - Use of Family Foundation

Mark: When the youngest of our three children went away to college a few years ago, we decided it was a good time to review our estate and transfer plans. We have been consistent givers to our church and other charities (including Hope Haven) and decided that a good estate plan for us would include significant gifts that could extend well beyond our lives.

Their solution was to include a family foundation funded through a donor advised fund that will be funded after both of their deaths with the proceeds of their pre tax retirement accounts that include traditional IRAs, 401k plan, and a profit sharing plan. The family foundation, with their children as directors, will be able to make substantial gifts of a lump sum after their death as well as continue annual giving from the foundation for an extended period of time to several charities listed by the donors.

The use of a private family foundation as a standalone trust can incur significant expenses with legal costs to establish and ongoing costs for accounting and tax preparation. The use of a donor advised fund reduces or eliminates many of these expenses and yet still allows the flexibility of the subsequent directors to use the proceeds for qualified charities with numerous investment options available.

The decision to use pre tax retirement accounts then eliminates all income taxes that have been deferred from contributions and investment returns. Their children will receive other tax favored assets to eliminate income tax liability on estate transfer.


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