Question Regarding Donor-advised Fund as Beneficiary

[Which Roger]

DW and I recently established a DAF with Fidelity Charitable, and are in the process of specifying our fund as a beneficiary of some of our retirement accounts. My question is: For those of you who have done similar, how did you specify the fund as a beneficiary? Doing this online at Fido or Vanguard, the field doesn't have enough room to type "Fidelity Charitable <Name of our fund> <fund number>", or even "Fidelity Charitable <Name of our fund>" so what we've done thus far is say "Fidelity Charitable Fund <fund number>" which does fit in the field. Is this correct and adequate?

 

[JoeWras]

I doubt that is adequate. It needs to specify your named fund, otherwise you risk it going to Fidelity Charitable's general fund.

I have Vanguard Charitable. They have good instructions about this which always includes giving the full name of our fund . I'm sure Fidelity Charitable does too. Call them, don't rely on us. And if the name is too long, call the retirement account provider and explain the situation and ask for guidance.

One more thing:we also have a general letter about our DAF and general wishes that we keep with our estate stuff. It is boilerplate provided by Vanguard Charitable. It isn't binding legal, but does make your estate aware.

 

[Which Roger]

I doubt that is adequate. It needs to specify your named fund, otherwise you risk it going to Fidelity Charitable's general fund.

I have Vanguard Charitable. They have good instructions about this which always includes giving the full name of our fund . I'm sure Fidelity Charitable does too. Call them, don't rely on us. And if the name is too long, call the retirement account provider and explain the situation and ask for guidance.

One more thing:we also have a general letter about our DAF and general wishes that we keep with our estate stuff. It is boilerplate provided by Vanguard Charitable. It isn't binding legal, but does make your estate aware.

Thanks for the reply. Upon closer inspection, I discovered that the on-line field at Vanguard is long enough to specify the full fund info, so I'm only limited at Fidelity (which is somewhat ironic).
And yes, DW and I are also writing a lot of "general wishes" to clarify the situation for those who may have to deal with our estate.

 

[RockyMtn]

call Fidelity Charitable or your Fidelity rep and have them walk you through it. I was able to make my Schwab DAF the beneficiary of my Fidelity IRA.

 

[jebmke]

call Fidelity Charitable or your Fidelity rep and have them walk you through it. I was able to make my Schwab DAF the beneficiary of my Fidelity IRA.

How have you structured successor advisor(s)? We are looking at a similar plan and I want to make sure it doesn't depend on one successor; if that successor dies or decides to "quit" then the assets revert to the custodian (Fidelity) "control" which is not what I would want to happen.

 

[Which Roger]

How have you structured successor advisor(s)? We are looking at a similar plan and I want to make sure it doesn't depend on one successor; if that successor dies or decides to "quit" then the assets revert to the custodian (Fidelity) "control" which is not what I would want to happen.

Fidelity Charitable offers 3 successor options:
- A person or persons
- A charity or charities
- An endowed giving program, which will pay out to a group of specified charities over a period of years.


Presently, DW and I are joint owners of our DAF. Successor is a trusted sibling to whom we will provide written wishes. So we have 3 (relatively) young and able people lined up now. When that changes, e.g., one of use passes away or is no longer able to manage affairs, we will likely switch to an endowed giving program that requires no human intervention.

 

[JoeWras]

We use an endowed plan. I don't want to rely on a successor advisor.

This is with Vanguard Charitable. Fidelity Charitable has very similar options.

The one problem with this is your endowed charities can go out of business. There are considerations for this. Make sure you plan properly.

 

[Which Roger]

We use an endowed plan. I don't want to rely on a successor advisor.

This is with Vanguard Charitable. Fidelity Charitable has very similar options.

The one problem with this is your endowed charities can go out of business. There are considerations for this. Make sure you plan properly.

When I started learning about DAFs, they often mentioned children as successor advisors, to keep the giving in the family across generations. No kids, so not applicable in my case.

Good point regarding charities going out of business. DW and I created a draft of an endowed plan, and limited the duration of payout to 10 years, rather than letting it pay out in perpetuity. That way there's a better chance that most or all of the charities will be around for the duration of the endowment.

 

[RunningBum]

My son is my successor. I like the idea of him making decisions on where whatever money is left there goes. He can use it for where he sees the need in real time, rather than me trying to control that money from the grave. Perhaps some of my charities will no longer be around, or will have gone off the rails, or is no longer dealing with vital issues.

 

[jebmke]

We use an endowed plan. I don't want to rely on a successor advisor.

This is with Vanguard Charitable. Fidelity Charitable has very similar options.

The one problem with this is your endowed charities can go out of business. There are considerations for this. Make sure you plan properly.

any number of things can happen as well. For example, a change in management could make them irresponsible and not worthy of a donation. That is why I would prefer to have one or more successors.

An alternative I am considering is a community foundation as the final destination. Or some combination - maybe one or more successors with guidance to them that if it becomes too much work they can arrange to draw it down to the foundation.

 

[JoeWras]

Most DAFs are very flexible in succession plans. Vanguard Charitable even allows the fund to be split into new funds with different succession strategies.

We don't have kids, hence our desire to set up a plan that goes on autopilot as much as possible.

In our plan, we have a list of charities for the endowment -like distributions. Should one go out of business, the pie goes to the others. Should they all fail, it goes to VGCs general fund.

We visit this every few years. We're in the process of doing so right now, checking up on the charities. We're removing some and adding others.

As jebmke says, some became unworthy. Too bad.

This is a good discussion here that is convincing me to limit the years in the plan which we previously had unlimited.