Only 1 out of 10 donors inform the charities they have named in their will about the pending bequest. Why are donors so reticent to tell charitable beneficiaries about their estate plans? This reluctance often gets in the way of prudent planning and a satisfying philanthropic experience.
Clients have many reasons for not informing their charitable beneficiaries. A will is private document. Even family beneficiaries are unaware of estate details. Informing beneficiaries can be misconstrued as a “pledge” that may make it difficult for the client to change her mind in the future. Finally, charities are associated with fundraising, which can be annoying and intrusive. Telling a charity of a bequest intention, the thinking goes, may only invite further fundraising attention.
All these reasons are valid. But it’s important to remember a bequest is probably the largest gift of a person’s life. Don’t be shy about asking the charity a few critical questions.
For lawyers, standard due diligence consists of making sure the will cites the correct legal name of the charity. This can be done by calling the charity, reviewing charity websites, and by checking Canada Revenue Agency online list of charities at https://www.cra-arc.gc.ca/chrts-gvng/menu-eng.html.
There is, however, more to making a charitable bequest than spelling the name of the charity correctly. My article “Charity Checklist: Working with Charities When Planning a Bequest” outlines ten due diligence questions to help assess the charity and plan the gift. It’s a tool for the engaged bequest donor. The article can be found at https://www.donorsguide.ca/articles.htm.
Malcolm D. Burrows, Head, Philanthropic Advisory Services, Scotia Private Client Group, firstname.lastname@example.org