If you have some assets set aside and are planning your estate with an attorney, you don't have to think only about what do with your investments and inheritors, but also what causes you might want to support after you die. Not all of your assets have to be inherited by family members. If you want to make a positive, lasting contribution after you pass away, consider setting up a scholarship to help fund the education of young minds in an area that means a lot to you.
Possible Scholarship Ideas
Your first decision will be deciding what endeavors you will want to support. What were your passions in life? Do you want people like you to have a leg up to success? You might consider these ideas:
- Create a fund supporting your own vocation. For example, if you were a heart surgeon, you might provide a medical school scholarship each year for one student at your alma mater.
- Establish scholarships for citizenship. If you had an active voice in your community, you might set up a grant that goes to someone who actively involves themselves with community betterment.
- Provide schooling for a minority group. If you are a successful woman in a scientific field or a Native American from a culturally strict background, you could support the dreams of a young person who faces the same cultural or economic barrier that you faced.
These are just a few ideas, but it is important for you to decide the how and what of the scholarship and to leave specific guidelines in place for who should be eligible for consideration. As part of your will, you will need to make sure that someone oversees the scholarship disbursement, and the more details you provide, the easier it will be for this person to assign the funds.
Methods of Payment
After you've decided on the details of the scholarship, you'll need to get down to the finer details—mainly, where the money is going to come from. If the scholarship is a one-time donation in your name to a school or individual, it is easy. Your attorney will make a note in your estate plan that directs the payout to the party you intend. However, if you want an ongoing trust that disburses funds regularly, you will need to
- assign someone to oversee the trust. This can be a lawyer, but if you are leaving a legacy, consider appointing a few trusted people who know the vision you are hoping to leave behind and who can hand-pick the candidates for receiving your money.
- decide how the trust will sustain itself. Typically, you would assign the profits from a specific investment to go toward the trust. For example, on a large account, you would accrue thousands of dollars in interest a year. The interest from a savings account or secure investment could be what is paid out yearly to a deserving applicant.
- take taxes into account. If you give money as a gift to an individual, some of it can be lost due to inheritance taxation. It's best to set up a charity that will receive the money for the scholarships. This charity will act as a third party that will then give the money to the recipients. Charitable donations are not taxable as income.
- decide whether or not others can donate to the scholarship. If you were an influential person in your workplace of community, setting up your scholarship as a memorial fund will allow people to donate their money privately to the cause you are leaving behind.
You can also make thing simpler by making a scholarship company the beneficiary of your will. This way, you can donate the bulk of your assets, and then the company will take over and send them to schools, people, or places depending on need. The downside to this option is that you have less say over how the money is spent.
If you are interested in learning more about planning a scholarship fund into your estate plan, contact a probate lawyer in your area, such as one from a firm like Bayer Jerger & Underwood.