Who to tell when you leave money to a charity

You don’t have to shout about your charitable giving from the rooftops to let your favourite non-profit know about an estate donation.

Considering the number of hospital wings and university buildings you see named after long deceased benefactors, you might be surprised to know that only around 10 per cent of testators who leave assets to charities actually notify them in advance – people with more modest estates are apparently also more modest about announcing their plans. 

I can understand why people may be a little shy about these issues, but a little transparency can be of benefit to everyone involved.

Charities really appreciate some prior warning, and smaller institutions in particular are often open to the views of potential donors on specific uses their money could be put to after they’re gone.

Depending on the nature of the gift, charities may also have their own ideas about what to do with the asset. For example, when people donate real estate, charities typically accept the bequest in cash after the property has been sold by the estate trustee. However, some property may be of use to the charity and they may prefer to keep it if consulted ahead of time. 

In addition to the charity itself, it’s also a good idea to let your other beneficiaries know about your plans. Many people leave money to charities when they have no other close family, but if there are other potential beneficiaries expecting an inheritance, the chance of an expensive estates dispute is much higher if the charitable bequest takes them by surprise.  

Last, but not least, your legal and tax professionals need to know your intentions so that your will can be structured to ensure your charitable wishes are carried out.

Estates are subject to different tax rules than individuals, so it can take some work to figure out the most tax efficient way to make a donation. But with the assistance of a good lawyer and accountant, you can put together an estate plan perfectly tailored to your individual situation.

Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.

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