Written on July 31, 2015 – 6:47 am | by Malcolm Burrows
Not nearly enough thought or ink is dedicated to the process of estate administration by charities. They are grateful recipients of gifts by will, but they are also legal beneficiaries with administrative and fiduciary responsibilities of their own. Many charities receive a steady flow of bequests and deal with a range of gifts, executors and administrative challenges.
Jill Nelson, Associate Vice President of Estate Giving, Princess Margaret Cancer Foundation recently wrote a useful piece in the newsletter Gift Planning in Canada in July on the topic of how charities can better manage estate donations. Jill outlines the players in the estate administration process – the testator, trustee (lay or professional), lawyer and the charity beneficiary. She observes that estate trustees are often “completely unprepared.”
“They may be overcome with grief at the loss that has put them in this position. They may harbor anger or resentment towards the deceased or some of beneficiaries. They may be working full-time jobs themselves, or have other life events that interfere.” In contrast she acknowledges the professionalism and relative ease of dealing with corporate trustees, which is reassuring to hear as a trust company employee.
While it is easy as a beneficiary to blame estate trustees for delays and confusion, Jill emphasizes to her charity audience the importance of being a proactive beneficiary. Princess Margaret has tight processes that include immediate acknowledgement, file assessment and scheduled follow-up dates. Specific bequests are followed up within 6-8 months and residual bequests in 12 months. They use these processes to help make cash-flow projections for budgeting purposes.
What Jill doesn’t mention is that when a will names multiple charities the beneficiaries frequently coordinate with each other when reviewing fees, accounts and requesting distributions. Large charities with experienced estate administrators often help smaller and/or volunteer-run charities. They may share resources if a lawyer or another professional needs to be hired. Pooling knowledge and resources makes a lot of sense, and trustees are wise to treat their collective action with respect.
Jasmine Sweatman, one of the regular contributors to this blog, wrote the excellent book called Bequest Management for Charitable Organizations. While it was first published in 2003, the volume is still available online and continues to be the best one-stop source of information for Canadian charities on the topic.