Raising Young Philanthropists

One consistent goal of estate planning clients who have children is to ensure financial stability for their children in the event that both parents die. These same parents often recognize that their children may not be mature enough to manage assets in a responsible way. To address this issue, trusts are created to ensure that someone who is financially savvy will manage the assets and make distributions to the children. The trust may even continue well into the adulthood of those children beneficiaries. In the process of the trust administration, many clients hope that the trustee will teach the children some financial responsibility.

Taking this concern about their children’s maturity level one step further, parents may want to consider whether their children will grow up to be charitably inclined.  This Wall Street Journal article, Teaching Charity to Young People by Veronica Dagher, discusses a few methods for teaching charity to children.  The theme of this article is that parents should lead by example and include children in their current philanthropic activities.

However, philanthropic education can continue even after a parent dies.  For example, donor advised funds or family foundations can be created to continue a giving tradition by setting up a fund from which children can direct gifts.  These options are not limited to wealthy families.  Although family foundations are quite complex and expensive to maintain, donor advised funds and charitable trusts are less expensive to create and administer.  Non-profits and community foundations have plenty of resources for individuals interested in charitable giving.  Most importantly, if parents feel strongly about raising children who give back to their communities, and they want the family giving tradition to continue after they are no longer living, it is essential to discuss this additional goal and the available giving options with an estate planning attorney.