How can you leave money to a foun­da­tion in your will?

To settle his or her estate in favour of a foun­da­tion, the philanthropist has three opti­ons. Which one he or she choo­ses depends on well thought-out asset and estate planning.

Depen­ding on the value of their estate, their moti­ves, and the amount of time they can devote to plan­ning, phil­an­thro­pists can consider the follo­wing three options:

I. Estab­li­shing a foun­da­tion during the founder’s lifetime

The first option is to create an inde­pen­dent chari­ta­ble foun­da­tion, which will receive part or all of the founder’s estate after their death. 

Under Swiss law, a body with a chari­ta­ble purpose may take the form of a foun­da­tion, asso­cia­tion or non-profit orga­ni­sa­tion. A foun­da­tion is gene­rally estab­lished when the foun­der wishes to allo­cate resour­ces to a chari­ta­ble purpose over the long term and for public benefit.

II. Estab­li­shing a foun­da­tion after the death of the founder

An ‘endow­ment’ foun­da­tion is a foun­da­tion estab­lished follo­wing the death of its foun­der. It is crea­ted based on instruc­tions left in the philanthropist’s will or contract of succes­sion, which will have been estab­lished during their life­time to imple­ment their plans after their death. After the death of the foun­der, the provi­si­ons in their will or contract of succes­sion replace the nota­rial deed crea­ted when they were alive. 

This type of foun­da­tion is expressly provi­ded for under Swiss inhe­ri­tance law, and the estab­lish­ment of such a foun­da­tion is the respon­si­bi­lity of the heirs of the decea­sed, or the execu­tor appoin­ted by the decea­sed, in accordance with the wishes expres­sed in their will, parti­cu­larly with regard to the portion of their estate left to the foundation.

As the foun­da­tion is crea­ted with money left by the decea­sed, the portion of their estate bequea­thed to it must comply with the Swiss laws on compul­sory inhe­ri­tance. This means that, if the decea­sed has rightful heirs, the bequest cannot exceed the available disposable part of the estate.

III.  Alter­na­ti­ves

Phil­an­thro­pists who do not intend to create their own foun­da­tion can choose to leave part of their estate to one or more exis­ting chari­ta­ble foun­da­ti­ons, to bene­fit speci­fic projects that address issues close to their heart. 

Such bequests, if made as part of a will or contract of succes­sion, must also comply with the Swiss laws on compul­sory inheritance. 

IV.  Conclu­si­ons

Of the opti­ons descri­bed above, the one a philanthropist choo­ses will depend on their own careful and conside­red estate and inhe­ri­tance plan­ning process. As part of this process, the philanthropist should consider:

  • The value of the portion of their estate that they wish to leave to the foun­da­tion (a considera­ble sum is requi­red to create a foundation)
  • The nature of the assets to be dona­ted (for exam­ple, family assets warrant the crea­tion of their own speci­fic foundation)
  • Their moti­ves and objectives 
  • When the foun­der or test­a­tor wishes their bequest to be made to the foundation
  • The role that the foun­der wishes to play during their own life­time, or entrust to their heirs or executor
  • The extent to which the foun­der or their estate will be invol­ved in estab­li­shing or admi­nis­te­ring the foun­da­tion (if they do not want to be invol­ved, dona­ting to an exis­ting foun­da­tion may be a better option)

Meti­cu­lous estate plan­ning, inclu­ding careful conside­ra­tion of all the opti­ons and their parti­cu­la­ri­ties, is ther­e­fore essen­tial in order to decide which one best fulfils the aims and desi­res of the philanthropist.

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