In their later years, donors often make commitments to charities with respect to the charitable giving that they intend to carry out during their lifetimes. Often these commitments are expressed by means of the donor and the charity entering into a written charitable pledge agreement.
The donor may be perfectly content with this arrangement, secure in the knowledge that if he dies before completely satisfying the charitable pledge, his executors will be required to do so from the assets of his estate. However, the donor’s security in this regard may be misplaced.
Although executors are required to satisfy any existing debts or obligations of the deceased from the assets of the estate, the legal enforceability of charitable pledge agreements at law is less than clear due to the fact that a “naked promise” to make a gift is not normally an enforceable obligation for the purposes of Canadian law. As such, depending upon the terms and conditions of the charitable pledge agreement and the surrounding circumstances, the executors may not be obliged to satisfy the gift from the assets of the estate and the beneficiaries could reasonably object to them doing so. The end result may be that the donor’s charitable giving intentions are thwarted.
Although there are relevant indicia that if included in a written charitable pledge agreement, could lead to the agreement being enforced by the courts following the donor’s death, why should donors take the chance that their charitable intentions will not be honoured or that a messy and protracted litigation may result?
A simple solution is for the donor to ensure that at the time that she makes the charitable pledge, she amends her Will to ensure that her executors are specifically directed to use estate assets to fulfill any portion of the charitable pledge that remains outstanding. If the donor clearly expresses her intentions in her Will, the beneficiaries will have less reason to squabble over the satisfaction of the charitable pledge, and the executors will not be required to spend time (and money) interpreting the legal enforceability of the charitable pledge made by the donor during her lifetime.
Laura E. West