Legal IQ Tips: Estate Planning
Do you intend to leave your favorite non-profit money in your Will or Trust? Does your Estate Plan leave money to an organization?
Leaving money to an organization that you have worked with or feel connected to is a noble thing to do. Many of my clients enjoy doing this, as they are nervous to give money they may need for their own care, during their lifetime, but are happy to donate some of their Estate, once they have passed on. It’s always wonderful if you can help support an organization monetarily, so that organization can continue to do their good work.
If you haven’t already, take a look at my last post for some other helpful tips on additional “things to think about” when leaving money to an organization.
3. WHO/WHAT organization are you ACTUALLY trying to leave your money to?
This seems like a pretty straight forward question, but it is really important to understand.
There are many organizations that are; subsets of larger organizations, local chapters, or that don’t operate their own budget or spending. Similar to my earlier point on “how does the organization spend its money” you really need to understand how the organization you intend to leave your money to OPERATES and if it works with an “umbrella” or national organization. If you don’t understand the relationship, your money may end up somewhere you didn’t intend.
For example, I learned of a situation where an individual left money to a local animal shelter. The individual was generous in their donation and intended for the money to be put aside so the shelter could build a much-needed new facility.
The issue here was that the animal shelter was a municipal shelter, not a private shelter. What does that mean? It means the town; owns it, operates it, and sets the budget for the shelter.
By leaving the money to the shelter, in the manner it was left, the individual unknowingly left the money to the town. While the money would be used to help the shelter/animals, the town was the entity who was to determine how the money would be spent at/for the shelter. In hearing about the situation, I learned that there was much concern that the money was going to be used for the day to day operations, rather than as the individual intended. That rather than this money being set aside, with other money raised, to build a new facility, this money would be used for food for the animals and salaries for workers.
While these are all well and good expenses, and necessities for keeping the shelter running, it’s not what the individual intended their money to be used for. This situation is really unfortunate. If the donor better understood WHO they were leaving the money too, and/or, in what manner they were leaving the money, their money would have been used as they intended.
In this situation, the individual could have possibly left the money to a “Friends of the Town’s Animal Shelter”. This organization would have been a more appropriate choice, in this situation, as that organization would have been able to manage the money and utilize it for the exact purposes the donor intended.
There are lots of examples I am made aware of regarding money left for one intended purpose but due to the organization it was left to, and that organization’s relationship or structure, the money not being used, as intended. It’s concerning and upsetting, especially because I know that with a little bit of research and a good Estate Planning Lawyer, this could have been avoided.
With all that said, there are no right or wrong answers on the above topics. Understanding an organization’s makeup is just another area you should consider when you think about leaving money in your Estate Plan. Working with an Estate Attorney will allow you to address these questions and better ensure your money is used for what you intended.
More to come on this topic. In the meantime, if you have any questions or need any help, don’t hesitate to contact me. I focus my Rhode Island based practice in everything from simple Wills to complicated Trusts.
