How to Set Up a Memorial Fund After Someone Dies

Two Types of Memorial Fund

Before you set anything up, you need to decide what kind of fund this is — because the setup, tax treatment, and administration are completely different.

Type 1: A fund to cover immediate expenses. Funeral costs, medical bills, lost income for the surviving family. This is what most people mean when they say "memorial fund" in the first week after a death. It's a personal fund — contributions are classified as gifts, not charitable donations. Donors cannot deduct them. The money flows to a family member's bank account.

Type 2: A fund to create a lasting legacy. Memorial scholarships, charitable endowments, donations to a cause the person cared about. This is a longer-term project. If the money goes through a registered 501(c)(3) charity, donors may be able to deduct their contributions under current tax rules. If it stays personal, they can't.

Most families start with Type 1 and later decide whether to establish a Type 2 memorial. Here's how to do both.

Setting Up an Immediate Memorial Fund

Step 1: Get an EIN

Apply for an Employer Identification Number on IRS.gov. It takes 10 minutes online and you'll get the number immediately. The EIN replaces the deceased person's Social Security Number for any financial accounts related to the estate or memorial fund.

You need this even if you're opening a simple bank account to receive donations. Banks require either an SSN or EIN on the account, and using the deceased's SSN creates problems down the road.

Step 2: Open a Dedicated Bank Account

Go to a local bank with:

• The EIN confirmation letter
• A certified death certificate
• Your photo ID
• Letters Testamentary or Letters of Administration (if you have them — some banks will open a memorial account without probate paperwork)

Open the account under the name "[Deceased's Name] Memorial Fund" or "[Deceased's Name] Estate Account." Having a dedicated account — separate from your personal accounts — is critical. Commingling memorial donations with your personal funds creates a tax documentation nightmare if the IRS ever asks where the money went.

Step 3: Choose a Collection Platform

You have two options: a crowdfunding platform (GoFundMe, Ever Loved, GiveSendGo) or direct bank deposits.

Crowdfunding platforms give you reach and social sharing tools. GoFundMe charges no platform fee but takes 2.9% + $0.30 per transaction in processing fees. The money goes directly to the beneficiary's bank account.

Direct bank deposits avoid all fees but require you to share banking details — which most families are uncomfortable doing publicly. A middle ground: set up the crowdfunding page for public donations and give the bank account details privately to close family members who want to contribute larger amounts directly.

Memorial Fund vs. GoFundMe

The term "memorial fund" implies something more formal than a GoFundMe, but functionally they're the same thing if the money goes to a family rather than a registered charity. The tax treatment is identical. The difference is presentation: a bank-account-based memorial fund with a formal name feels more dignified to some families, while GoFundMe is faster to set up and easier to share.

Use GoFundMe (or a similar platform) when speed matters and you need to raise money in 48 hours. Use a formal memorial fund with a bank account when the family wants something more structured, especially if contributions will arrive over weeks or months.

Setting Up a Legacy Memorial Fund

If the family wants to create something permanent — a scholarship, an ongoing charitable fund, a named endowment — the setup is more involved.

Option A: Partner with an Existing Charity

The simplest path. Contact a cause the deceased supported and ask about establishing a named fund. Many charities accept endowment gifts starting at $10,000 to $25,000. The charity handles all tax compliance, receipting, and administration. Eligible donors may claim deductions for qualifying gifts because the charity already has 501(c)(3) status.

Option B: Use a Donor-Advised Fund (DAF)

Open a DAF through Fidelity Charitable, Schwab Charitable, or a community foundation. Minimums vary ($5,000 to $25,000). You make an irrevocable gift to the DAF, may claim a tax deduction under the rules that apply to you, and then recommend grants to specific charities over time. The family stays involved in directing the money without the overhead of running their own foundation.

Option C: Establish a Standalone Foundation

This is the heavyweight option and only makes sense for large estates. You'll need legal counsel, annual IRS filings, a board of directors, and enough capital to sustain the foundation's operating costs. A typical initial endowment is several million dollars.

Tax Rules to Know

• Personal memorial fund contributions are generally not taxable to the family when they qualify as personal gifts
• Personal memorial fund contributions are not deductible for the people giving them
• For third-party settlement organizations, the current IRS reporting threshold for transactions involving goods or services is more than $20,000 and more than 200 transactions in a calendar year. Personal gifts should not be reported on Form 1099-K; if you receive one, keep records showing the funds were gifts and contact the issuer about a correction
• Donations to a registered 501(c)(3) charity may be deductible for eligible donors, subject to current federal rules and AGI limits

The Flowers, Donations & Memorial Contributions Guide walks through the entire fund setup process with checklists, platform comparison worksheets, and a Donation Tracking Spreadsheet to keep every dollar accounted for.