WaterStone Family Legacy Fund – A Giving Vehicle with High Octane

A Family Legacy Fund is designed to accomplish both short and long-term family giving objectives. Through a WaterStone Family Legacy Fund, a family gains the flexibility of a public foundation with the structure and control associated with private foundations. It is an excellent alternative for a family who has significant assets earmarked for churches, ministries, and charities – every type of nonprofit doing the Lord’s work.

Favorable Tax Treatment

A Family Legacy Fund provides superior tax benefits.

  • You can deduct cash gifts to a Family Legacy Fund up to 50% of Adjusted Gross Income (AGI). With private foundations you can only deduct up to 30% AGI.
  • With a Family Legacy Fund, you can avoid the private foundation excise tax.
  • The Family Legacy Fund also offers the ability to determine your deduction based on the fair market value of the asset gifted, assets such as closely-held stock and real estate. With a private foundation, you only gain a cost basis deduction.

    Through WaterStone, a Family Legacy Fund costs less than hiring the outside counsel necessary for a private foundation.

  • Since WaterStone oversees the Family Legacy Fund’s transactions, annual audit and IRS Form 990 filing, a family can rest assured their giving program is in full compliance with government administrative requirements.
  • The Family Legacy Fund’s cost is lower than hiring the outside counsel necessary for a private foundation.

More Control

The Family Legacy Fund is overseen by a separate board of directors made up of family members, outside advisors and WaterStone. Since family members cannot make up a majority of the board, WaterStone, in consultation with the family, appoints the greater half of the board. The Family Legacy Fund files its own articles of incorporation which will contain WaterStone’s statement of faith. This structure provides assurance to the family that the values on which the Family Legacy Fund is established will not be overturned by future generations – like so many well-known private foundations – and that giving by future generations will support missions aligned with those values.

For families with charitable assets that exceed $2M, a WaterStone Family Legacy Fund provides greater flexibility than a private foundation, enhanced tax benefits, and exceptional control.

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