Scholarship Planning is a way for individuals to leave a legacy and support deserving students through college or graduate school.  By making a bequest through a will or trust, scholarship sponsors are able to communicate a message about what matters most in their lives, and ensure that his or her intentions are clearly stated and followed by those administered the estate.  With rising tuition costs, younger generations are finding themselves encumbered with student loan debt.  Scholarship Planning is a great tool for individuals who highly value education, and desire to leave a legacy that will help individuals in achieving their educational goals.

Scholarship Planning can be achieved a number of ways.  Making outright gifts, establishing a scholarship fund and setting up a foundation are common avenues.

Bequests can be made directly from the estate to an existing scholarship foundation.  When this is done, the existing foundation will typically manage the investment of the funds and award scholarships in the name of the donor, or in the name of someone the donor wishes to honor.  Gifts of this type are almost always tax deductible, and have positive estate tax consequences as the size of the estate is reduced by the amount of the scholarship donation.

Establishing a scholarship fund is an additional avenue to create scholarships through your estate plan.

Another way to give scholarships through your estate plan is by creating a private foundation.  By doing this, donors are able to give scholarships to specific purposes and populations that aren’t always achievable when working with public foundations.  Donors can designate his or her own criteria for scholarships recipients and determine who will guide investments and select recipients.  When set up correctly, private scholarship foundations can also receive the same tax breaks as a public or charitable foundation.

Setting up a Scholarship for future generations is one way to build a legacy and use accumulated wealth in a positive way by passing on your values.

The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Schromen Law, LLC and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.


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