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Private Foundations

PRIVATE FOUNDATIONS AS A TAX PLANNING DEVICE

The Law Offices of Kennedy & Jackson
Houston, Texas
713-783-7444 | Email

Charitable giving is often a major component of the estate plans of individuals and families with high net worth. Given the choice between giving their wealth to the government in the form of estate taxes and giving their money to a charitable organization of their choosing — most people will choose the second option.

PRIVATE CHARITABLE FOUNDATIONS COMPARED TO CHARITABLE TRUSTS

Rather than making bequests to charitable organizations, some families decide to form a charitable foundation. Depending on a family’s specific circumstances, a charitable foundation may have several advantages over a charitable trust.

  • Long-term control over assets: A private foundation allows a family to maintain control over the distribution of contributions to charity over a period of several generations — instead of making a one-time donation via a charitable trust.
  • Employment opportunities for future generations: A private foundation allows a family to provide for the employment of the generations that follow, because family members (e.g., children) may be members of the board of directors of a private charitable foundation.
  • Zero estate tax planning: A private charitable foundation is one of only a few estate planning instruments that allows an individual to both provide financial resources to heirs (in the form of employment opportunities) and decrease estate tax liability to zero. As described in more detail on the Charitable Trusts page of this website, gifts made to charitable organizations are 100 percent exempt from federal estate and gift taxes.

There are more than 100,000 private foundations in the United States, making annual contributions of $40.7 billion (National Center for Charitable Statistics, 2006). Funding from private foundation contributed to the search for a vaccine for polio and funded the development of rocketry science in the United States. Hermann Hospital in Houston was founded by a private foundation.

LEGAL AND FINANCIAL ADVICE REGARDING ESTABLISHMENT OF A PRIVATE FOUNDATION

At The Law Offices of Kennedy & Jackson, located in Houston, Texas, we have all the required skills to help your family establish and maintain a private charitable foundation. Our attorneys can examine your existing asset structure as part of our estate planning and asset protection legal services.

Once we understand your family’s wealth base and future wishes, we can provide clear and up-to-date advice about whether a private foundation would be a wise addition to your existing estate plan. If you choose to establish a private foundation, we have the experience in business entity formation to walk you through the specific steps required for the formation of a private charitable organization.

CONTACT THE LAW OFFICES OF KENNEDY & JACKSON

Our law office is located in the Galleria area of Houston, with free on-site parking available next to our office building. We provide a complimentary — and confidential — initial consultation to all new potential clients.

To schedule an appointment with one of our lawyers, call 713-783-7444 or send us an email