When high-net-worth couples divorce, sometimes the causes they’ve supported over the years are among the casualties. That doesn’t have to be the case.
Likely, you and your spouse both want to continue your commitment to your philanthropical efforts after your marriage is over. Dividing your philanthropic assets and pledges and determining how each of you will continue to support the causes you care about and that have come to depend on you will take planning and some level of cooperation.
As you take steps to separate your philanthropic footprint, each of you will probably choose the causes that mean the most to you individually. However, if you’ve been major donors to one or charities over the years, it’s generally recommended that you continue that commitment for at least a year to let the charities find other donors or adjust their financial goals. You don’t need to have Bill and Melinda Gates-level philanthropy to create an issue for a charity if you suddenly cut your giving by half (or more).
Philanthropic assets that aren’t part of the marital estate
Assets that you’ve already donated via a charitable entity no longer belong to you, even though you likely have a say in how they’re used. Common charitable entities include:
- Private foundations
- Charitable remainder trusts
- Donor-advised funds
The options for dividing or terminating these vary. It’s also important to consider what will happen with planned gifts and pledges and how the responsibility for making these donations will be divided.
There’s a lot to consider as you think about what you want your individual philanthropic endeavors to focus on moving forward. We’ve just skimmed the surface here. That’s why it’s crucial for you and your legal team to consult with financial, tax and philanthropic advisors as you maneuver this complex part of your divorce.