A donor-advised fund (DAF) can feel like a personal charitable account, but it legally belongs to someone else once the money is contributed. That distinction shapes what a Florida estate plan can and cannot accomplish with a DAF, and it catches many donors off guard when they assume the account passes like any other asset.
Under IRC § 4966(d)(2), a donor-advised fund is owned and controlled by the sponsoring charitable organization, even though the donor or a designated advisor retains privileges to recommend investments or grants.
Once contributed, the funds are no longer the donor’s personal property. Therefore, a will provision leaving “my donor-advised fund” to a child does not transfer ownership the way that phrase would for a bank or brokerage account.
Naming a successor advisor is handled under the sponsoring organization’s own account rules rather than ordinary inheritance law. Some sponsors, for example, let an account holder nominate an individual successor, a charity to receive the balance, or an endowed giving arrangement, though each structures this differently. An account with no election on file typically defaults to that sponsor’s own policy.
In Florida, a qualified charitable distribution from an IRA under IRC § 408(d)(8) cannot be directed to a DAF. Therefore, retirees planning lifetime giving need a separate strategy for that goal.
Additionally, under IRC § 4967, if a donor, advisor, or family member receives more than an incidental benefit from a recommended distribution, excise taxes can apply, meaning a successor advisor inherits a role, not family wealth. When a Florida trust also directs money to a DAF sponsor at death, the trustee administers that gift under the trust’s terms and Florida’s trustee powers.
Because the sponsor’s succession paperwork and the donor’s will or trust operate on separate tracks, it is worth reviewing both together and revisiting the sponsor’s election after a death in the family, a divorce, or any major change in charitable priorities.
At Schnauss Naugle Law, we can help review your DAF’s succession terms alongside your will or trust so your charitable intentions and your estate plan line up. Call us at 904-643-6342, or reach out to us to go over your account and beneficiary designations.
