Setting up a family foundation can have tremendous tax benefits for your family, but it can also be complicated to navigate.  A family foundation is a type of private foundation that is typically created and funded by a single family. Family foundations are distinct from public charities in a number of ways, most notably in their funding sources and governance structures. You can explore various online websites to get more information about foundation tax preparation services.

While the vast majority of family foundations are grant making foundations, some families choose to operate their foundation as a supporting organization or donor-advised fund. Grant making family foundations typically distribute grants to other 501(c)(3) organizations, while supporting organizations and donor-advised funds have more flexibility in how they can use their funds.

Family foundations are governed by a board of directors, which is typically made up of family members and/or close friends. The board is responsible for making all major decisions about the foundation, including its grant making priorities and strategic direction.

There are many tax benefits associated with creating and maintaining a family foundation. For example, donors can receive an immediate income tax deduction for contributions made to the foundation. In addition, the foundation itself can avoid paying taxes on investment income and capital gains.

Families who are interested in creating a family foundation should work with an experienced attorney or accountant to ensure that they understand all the legal and tax implications involved.