Starting a legal defense fund - questions

[SomeGuyOnTheWeb53]

Hi folks, we are thinking about starting a legal defense fund and are wondering what the steps are. For tax purposes, should we start a business entity of some kind, or perhaps a non-profit company, to handle the finances of the legal defense fund? Any information about creating a legal defense fund would be most appreciated. Thank you!

 

[Just Blue]

Hi folks, we are thinking about starting a legal defense fund and are wondering what the steps are. For tax purposes, should we start a business entity of some kind, or perhaps a non-profit company, to handle the finances of the legal defense fund? Any information about creating a legal defense fund would be most appreciated. Thank you!

What state?

 

[quincy]

Hi folks, we are thinking about starting a legal defense fund and are wondering what the steps are. For tax purposes, should we start a business entity of some kind, or perhaps a non-profit company, to handle the finances of the legal defense fund? Any information about creating a legal defense fund would be most appreciated. Thank you!

It probably would help if you had an attorney involved.

 

[adjusterjack]

we are thinking about starting a legal defense fund

Who is "we"?

Defense fund for whose benefit?

Where will you get the money?

How will you use the money?

should we start a business entity of some kind, or perhaps a non-profit company,

You would be wise to consult an attorney and CPA who are experienced with charitable organizations.

 

[quincy]

Here is a link to Best Practices Guide to Setting Up a Legal Defense Fund,” published by the National Lawyers Guild and the National Bail Fund Network:

https://www.nlg.org/wp-content/uploads/2018/07/NBFN-NLG-Legal-Defense-Fund-Guide-FINAL.pdf

 

[Taxing Matters]

Hi folks, we are thinking about starting a legal defense fund and are wondering what the steps are. For tax purposes, should we start a business entity of some kind, or perhaps a non-profit company, to handle the finances of the legal defense fund? Any information about creating a legal defense fund would be most appreciated. Thank you!

The term "legal defense fund" can refer to a lot of different things. And the details make a difference. For starters, what is the purpose of this fund? Is it to raise money for yourself, a family member, or friend to pay for defense in some criminal/civil matter? Is it to raise money for some other specific individual? Or are you raising money for a defense fund for a particular cause rather than specific individuals in mind?

 

[quincy]

As a possibly important note: The popular fundraising site “GoFundMe” does not permit legal defense fundraising.

 

[zddoodah]

we are thinking about starting a legal defense fund

Who are "we"?

and are wondering what the steps are.

That depends, for starters, on exactly what you mean by "legal defense fund."

For tax purposes, should we start a business entity of some kind, or perhaps a non-profit company, to handle the finances of the legal defense fund?

Given that you've given us virtually no clue what you're seeking to do, it would be impossible to opine intelligently about the advisability of conducting or not conducting this thing through "a business entity of some kind." What would make you think a non-profit company would be a good idea?

Consult with a business attorney, a CPA/tax advisor, and an insurance agent.

 

[quincy]

The link to the guide on “best practices to setting up a legal defense fund” that I provided earlier lists questions that anyone considering setting up a legal defense fund should be able to answer. One important consideration is the state from where the defense fund will operate.