Charitable Bequests, How Widespread?

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Strider
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Charitable Bequests, How Widespread?

Post by Strider »

In reviewing our estate planning documents with our attorney, I asked what percentage of assets in wills/trusts people typically leave to charities/not-for profits upon their deaths. He replied that most leave nothing to such organizations; that most people leave the entirety of their estates to children and other relatives.

I find this hard to believe. Perhaps his sample size is small (unlikely, since he has practiced law for many years), or perhaps the demographic he deals with falls into this category.

My spouse and I are leaving the bulk of our estate to relatives, but also a small percentage to educational/environmental/religious organizations.

I am curious how many fall into each category (keeping in mind that Bogleheads are not a typical cross-section of society).

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HomeStretch
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Re: Charitable Bequests, How Widespread?

Post by HomeStretch »

Spouse and I plan to leave our estates to each other with the survivor leaving their entire estate in trust to our children. Our siblings have done well financially and don't need any help.

Our plan during our lifetime is to continue making charitable donations through our donor-advised fund (DAF). One child is listed as the successor for our DAF and will handle any final distributions if there is any balance when we both pass.

In the catastrophic scenario (where we outlive our beneficiaries), we have left bequests to relatives but the majority of our estate goes to a charitable foundation that in turn will allocate the funds to various charities based on our wishes. We punted on that decision when doing our wills as we just weren't sure and my spouse didn't want relatives to have a reason to bump us off. :D However, we will be doing a post-SECURE Act update to our wills in the near future and will revise them in the catastrophic scenario to leave the bulk of our estate to our relatives and the remainder to our DAF with a relative handling the DAF distributions (I think that's allowed). I don't want to name any charities directly in our wills as I have heard that charities can be very aggressive towards the Executor and other beneficiaries when they have standing by being named in the will. Don't know if that's true but I think the DAF is a more orderly way to handle whatever charitable bequests we may have. We will seek counsel from our trusts and estate attorney.
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Re: Charitable Bequests, How Widespread?

Post by Fractalleaf »

Every year I transfer highly appreciated stock to a donor advised fund and make donations to charities throughout the year. The balance of the DAF will go to a single charity in the end, but the goal is to distribute most of it during our lifetimes. I like to evaluate charities every year, depending on the needs of the world, rather than designate charities for lump sums years in advance.
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Re: Charitable Bequests, How Widespread?

Post by KlangFool »

OP,

https://www.indiatimes.com/trending/soc ... 67981.html

"66% of the family’s and the company’s fortune is given away as charity

Sixty-six per cent of Tata Sons' equity is held by the Tata Trusts and dividends flow directly to support the philanthropic work of the Trusts. Over the past century and a half, the Tata group has calibrated its mission to address India's most urgent needs. Due to his charity work, any profit made by the company doesn’t impact Ratan Tata’s personal financial statement."

https://en.wikipedia.org/wiki/Tata_Group
"The Tata Group (/ˈtɑːtɑː/) is an Indian multinational conglomerate headquartered in Mumbai.[4][5] Established in 1868, it is India's largest conglomerate, with products and services in over 150 countries, and operations in 100 countries across six continents. Acknowledged as the founder of the Tata Group, Jamsetji Tata is sometimes referred to as the "father of Indian industry".[6]"

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ThankYouJack
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Re: Charitable Bequests, How Widespread?

Post by ThankYouJack »

Your attorney's response doesn't surprise me. I give some to charity now, but don't think I'll leave anything to charity. Reason being is to make the largest direct impact with people who have been there throughout my life. I have a lot family and friends who could use some extra money and it could impact their lives in a greater way than giving it to a large organization.
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Re: Charitable Bequests, How Widespread?

Post by sailaway »

I know one couple that plans to make significant philanthropic bequests through estate planning (they are also quite generous now). I know many couples who would consider such a thing as stealing from their children. I asked my in laws what charity they would like supported in their name and they looked at me like I had grown a tenth head (they think I am odd in general, so two through nine were already in place).
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Re: Charitable Bequests, How Widespread?

Post by Lee_WSP »

While lifetime gifting is relatively widespread. Charitable giving at death is mostly reserved to the truly wealthy and very religious. And people with no family they like.
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Re: Charitable Bequests, How Widespread?

Post by Weathering »

A family friend (lifelong surgeon) left to their life partner all they would need to live out their life (there were no children), with the remainder going to a charitable organization. Upon the death of the family friend, the charitable organization immediately sued the life partner to get their funds quickly instead of waiting for the partner to pass. The partner then had to estimate how much they would need to live out their life (they were age 62 at the time), which was challenged several times by the charitable organization. In total, it caused two years of grief for the partner of our family friend before the matter was settled. This soured me against ever considering such an open-ended bequest. I'm just saying to make sure all the details are known and communicated before passing so there aren't unexpected events when it is too late to do anything about it.
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Re: Charitable Bequests, How Widespread?

Post by Swansea »

About 85% to charity, the rest to friends.
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Re: Charitable Bequests, How Widespread?

Post by Mike Scott »

It's a personal choice. Some people do and some don't. Many people (majority?) don't really have any estate to leave to anyone. The first couple of results on google says that about 70% of Americans give to charity in one form or another which means about 30% don't. A separate result says the average American giving is about $737 annually. That sounds like believable ballpark numbers to me. We choose to "give along the way" rather than saving it up for "later". If we have any estate to leave, it will be for spouse/children.
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Re: Charitable Bequests, How Widespread?

Post by TomatoTomahto »

Weathering wrote: Fri Aug 12, 2022 12:59 pm A family friend (lifelong surgeon) left to their life partner all they would need to live out their life (there were no children), with the remainder going to a charitable organization. Upon the death of the family friend, the charitable organization immediately sued the life partner to get their funds quickly instead of waiting for the partner to pass. The partner then had to estimate how much they would need to live out their life (they were age 62 at the time), which was challenged several times by the charitable organization. In total, it caused two years of grief for the partner of our family friend before the matter was settled. This soured me against ever considering such an open-ended bequest. I'm just saying to make sure all the details are known and communicated before passing so there aren't unexpected events when it is too late to do anything about it.
Would a clause saying that the charitable donation evaporates if the will is contested work? Of course, if you anticipate such an event, you probably don't leave it to the charity in the first place.

Probably should have left everything to life partner with a request to fund charity upon partner's death.
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Re: Charitable Bequests, How Widespread?

Post by JPM »

Maybe most philanthropically minded people below the 10 or 20 million dollar NW range prefer to enjoy donating while alive.

Maybe 35 years ago a colleague was for some reason unknown to me attending a meeting of his daughter's nearby Roman Catholic parish church dealing with a plan for a school addition and gymnasium. There had been a substantial shortfall in fund raising so plans had to be altered. Dr Soandso's grandchildren were attending the school there. The pastor advised the people gathered that the gymnasium could not be built given the shortfall of fundraising but that the needed classrooms would be built. Dr Soandso asked the pastor how much money would be needed to include the gymnasium. The pastor gave the figure of several hundred thousand dollars. Dr Soandso agreed on the spot to make up the difference himself and his DW. Dr Soandso was neither a member of the church nor a catholic. He admitted to indulging a proud little smile whenever he passed the church's grounds on the main drag of the town. Not sure if he got all of his money's worth, but he sure enjoyed a lot of naches having donated it. He has passed on now and his daughter and grandkids moved away. They named the gym after him when it was built and it bears his name to this day. He probably left his estate to his daughter and grandkids.

IMO Dr Soandso had the right idea. Enjoy the giving and seeing what they do with the gift. IMO that is more pleasurable than imagining what they might do with it after you're gone.
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Re: Charitable Bequests, How Widespread?

Post by Lee_WSP »

TomatoTomahto wrote: Fri Aug 12, 2022 1:11 pm
Weathering wrote: Fri Aug 12, 2022 12:59 pm A family friend (lifelong surgeon) left to their life partner all they would need to live out their life (there were no children), with the remainder going to a charitable organization. Upon the death of the family friend, the charitable organization immediately sued the life partner to get their funds quickly instead of waiting for the partner to pass. The partner then had to estimate how much they would need to live out their life (they were age 62 at the time), which was challenged several times by the charitable organization. In total, it caused two years of grief for the partner of our family friend before the matter was settled. This soured me against ever considering such an open-ended bequest. I'm just saying to make sure all the details are known and communicated before passing so there aren't unexpected events when it is too late to do anything about it.
Would a clause saying that the charitable donation evaporates if the will is contested work? Of course, if you anticipate such an event, you probably don't leave it to the charity in the first place.

Probably should have left everything to life partner with a request to fund charity upon partner's death.
I have no idea what the circumstances surrounding the estate plan were, but forcing an early buyout of a life estate is rare IMO and not exactly forced, forcing an early end to a trust as the remainder beneficiary is unheard of to me. But, I don't do litigation.
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Re: Charitable Bequests, How Widespread?

Post by tunafish »

Lee_WSP wrote: Fri Aug 12, 2022 12:57 pm While lifetime gifting is relatively widespread. Charitable giving at death is mostly reserved to the truly wealthy and very religious. And people with no family they like.
I fit in none of those categories. I own the family house and other family real estate and am leaving that to family members. The rest goes 1/3 to charity, 2/3 to family. I also donate now.
Last edited by tunafish on Fri Aug 12, 2022 2:27 pm, edited 1 time in total.
NotWhoYouThink
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Re: Charitable Bequests, How Widespread?

Post by NotWhoYouThink »

If you're givin' while you're livin' then you're knowin' where it's goin'.

That's the advice a local philanthropist gave me about giving now vs. giving from my estate.
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Re: Charitable Bequests, How Widespread?

Post by PhoebeCoco »

I'll weigh in, as someone with no close family.

If I died right now, 60% of my investments would go to charity, and 40% to friends.

My closest friend would get my real estate.
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Re: Charitable Bequests, How Widespread?

Post by Mr. Rumples »

I want my heirs which are nieces and nephews to get the bulk, however, I have established an endowed scholarship so I will live forever. The criteria is set forth as a contract with the local community foundation to ensure things don't go astray; of course, that could happen, nothing is guaranteed.

Unfortunately, it's not possible to do what Jeremy Bentham did, which was to have his skeleton placed in a suit stuffed with hay and his head mummified and left on display at the school. When I update my estate plan, I will leave the yard guy some $.
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Re: Charitable Bequests, How Widespread?

Post by Broken Man 1999 »

I have no millions to give to charity, but what my current plans are is to leave nothing to charity.

The idea that my gifts could be used for causes I deeply abhor is not appealing.

My current modest gifts are such that I am able to examine my charity's "worthiness" each year. I can make the determination to continue supporting the charity, or to move on to another better suited to my interests each year. Kinda hard to do personally if I am dead.

If there is one group I have no qualms about leaving my $$$$ it would be my descendants. After all, I have had years of close observation of their character, and thus far I have not found any lacking. And, charity does begin at home.

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Re: Charitable Bequests, How Widespread?

Post by Broken Man 1999 »

NotWhoYouThink wrote: Fri Aug 12, 2022 2:26 pm If you're givin' while you're livin' then you're knowin' where it's goin'.

That's the advice a local philanthropist gave me about giving now vs. giving from my estate.
Henry Ford would disagree!

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Re: Charitable Bequests, How Widespread?

Post by MarkerFM »

Our current plan is to leave our tax deferred accounts (about 10% of NW and substantial) to a DAF, part of which our kids will control. The kids will get the rest. Nothing to siblings and nieces/nephews as we aren't very close. After reading some of these posts, maybe we should reconsider.
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Re: Charitable Bequests, How Widespread?

Post by fourwheelcycle »

Twenty-five percent to charity, 75% to our children.
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Re: Charitable Bequests, How Widespread?

Post by FreddieFIRE »

Lee_WSP wrote: Fri Aug 12, 2022 12:57 pm While lifetime gifting is relatively widespread. Charitable giving at death is mostly reserved to the truly wealthy and very religious. And people with no family they like.
Or people just over the federal estate tax exclusion who would rather leave 100% of the excess to charity than 60% to heirs (the other 40% to the IRS)?
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Re: Charitable Bequests, How Widespread?

Post by Lee_WSP »

FreddieFIRE wrote: Fri Aug 12, 2022 4:57 pm
Lee_WSP wrote: Fri Aug 12, 2022 12:57 pm While lifetime gifting is relatively widespread. Charitable giving at death is mostly reserved to the truly wealthy and very religious. And people with no family they like.
Or people just over the federal estate tax exclusion who would rather leave 100% of the excess to charity than 60% to heirs (the other 40% to the IRS)?
Any couple over the estate tax is truly wealthy. Anyone over the lower tax in 2026 is still pretty wealthy.

And no, in general they're going to either not care about it or jump through all sorts of legal hoops to reduce that bill.

You're either charitably inclined or not. IME/Imo
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Re: Charitable Bequests, How Widespread?

Post by dodecahedron »

Simplest and cleanest way to leave money to a charity is designate the charity as a percentage beneficiary of one of your tax-deferred retirement accounts or your HSA.

I do NOT recommend designating charitable beneficiary in your will. That can add significant expense, time, and hassle to settling the estate. In our state, the Attorney General's office will have to sign off that the interests of the charities designated in the will were adequately protected before the estate can be closed out.

If a charity changes its name or merges with another charity or goes out of business between when you draw up your will and when you die, you need to update your will. Much easier and cheaper to change beneficiary designations on a tIRA than go back to your lawyer and change the language in your will.

Best of all, in my opinion, is to designate your DAF as a beneficiary of a tax-deferred account AND regularly update your instructions to the DAF about how to direct funds remaining in your DAF after your death. Also recommend designating trusted successor advisors who share your values to your DAF and leaving them an informal non-binding letter of instructions about your wishes.

Keep in mind that you may spend a number of years incapacitated before you leave this earth. You may not be able to change your will as your most urgent charitable priorities change (e.g., your disease of choice may be cured, etc.) A DAF with trusted successor advisors who share your values is a better solution than a will you can no longer update.

That, at least, is what I will be doing. My two daughters share my values and I trust they will honor my charitable intentions by directing whatever is left in my DAF using their best judgment about existing world conditions and charities serving the most urgent needs after I am gone.
Last edited by dodecahedron on Fri Aug 12, 2022 5:25 pm, edited 1 time in total.
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Re: Charitable Bequests, How Widespread?

Post by Silverado »

100% minus $10k is going to a charity for us. The $10k going to a cousin with a note “take a nice trip”. We give several thousand a year to charity.
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Re: Charitable Bequests, How Widespread?

Post by GerryL »

I'm a solo with a small family. Only one nephew, who is pretty well set up in life thanks to parents who have done even better than I have. Most of my estate will go to charity, with a nice chunk for nephew and some to some good friends. Friends and nephew are designated as a team to help manage my affairs when I die ... or if I first become incapacitated. How much anyone gets is, of course, determined by the markets and by how long I live.

I have enough cushion that I am able to make charitable gifts while still vertical. The biggest expenses in my budget are charity and travel.
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Re: Charitable Bequests, How Widespread?

Post by NotWhoYouThink »

Broken Man 1999 wrote: Fri Aug 12, 2022 2:56 pm
NotWhoYouThink wrote: Fri Aug 12, 2022 2:26 pm If you're givin' while you're livin' then you're knowin' where it's goin'.

That's the advice a local philanthropist gave me about giving now vs. giving from my estate.
Henry Ford would disagree!

Broken Man 1999
Good point. As the Ford Foundation continued, the donations and focus may have diverged from Henry's preferences. I don't have his money, but plan to give enough along the way that my kids won't be unduly burdened by managing their inheritance.
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Re: Charitable Bequests, How Widespread?

Post by RadAudit »

Strider wrote: Fri Aug 12, 2022 12:03 pm In reviewing our estate planning documents with our attorney, I asked what percentage of assets in wills/trusts people typically leave to charities/not-for profits upon their deaths. He replied that most leave nothing to such organizations; that most people leave the entirety of their estates to children and other relatives.
I think your attorney may be right based on his view of the demographic's of his clientele or the population at large. (However, my estate attorney thought I was well off. Boy, was he wrong. So, there's that.)

In my case, if I'm the first to go, DW inherits everything. After both of our deaths, assuming there's anything left, the estate is split 50/50 among the kids. The basic idea is that the kids may need the help.

Now, charities/non-profits get a fair amount for an annual contribution.

However, BHs may not be a representative sample of the population at large. I'm told estate finances get complicated the more money you have. I'd suggest you do what you think is best for you and yours in your situation.
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Re: Charitable Bequests, How Widespread?

Post by bsteiner »

dodecahedron wrote: Fri Aug 12, 2022 5:16 pm ...
I do NOT recommend designating charitable beneficiary in your will. That can add significant expense, time, and hassle to settling the estate. In our state, the Attorney General's office will have to sign off that the interests of the charities designated in the will were adequately protected before the estate can be closed out.

If a charity changes its name or merges with another charity or goes out of business between when you draw up your will and when you die, you need to update your will. Much easier and cheaper to change beneficiary designations on a tIRA than go back to your lawyer and change the language in your will.
...
The Attorney General is an interested party (in some states, including New York) if charity is a residuary beneficiary, since the amount the charity receives depends on what the executors do. We have a case pending where we represent the charity, and the Attorney General is going after the executor for paying a few hundred thousand dollars of personal expenses out of the estate. (The expenses were legal fees, so she's asking the recipient lawyer to repay it.) But if charity receives a general (preresiduary fixed dollar) bequest, the Attorney General isn't an interested party, since the amount the charity gets is fixed.

If the charity changes its name, it's still the same charity. Similarly, if it merges, the surviving entity gets the bequest. However, if the charity ceases to exist, there are two issues. There's an issue as to whether the bequest fails (which is likely to be the case if the charity gets a general (fixed dollar) bequest, since the presumption is that providing for the particular charity was paramount) or whether cy pres applies (meaning that the court will substitute another charity) (which is likely to be the case if the charity gets a share of the residuary, since the presumption is that providing for charity was paramount).

If cy pres applies, the executor will propose an alternative charity that's similar or (if the Will specified a purpose) one that can accomplish that purpose, or a similar purpose. In New York, the Attorney General is a party.

We have a pending case where there was a general (fixed dollar) bequest to a charity that was no longer in existence. Even though the family probably could have avoided paying it to charity, the family wanted to give the money to charity, and proposed another charity. The lawyer in the Attorney General's Charities Bureau asked us to explain the choice, and then consented.
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Re: Charitable Bequests, How Widespread?

Post by bsteiner »

Strider wrote: Fri Aug 12, 2022 12:03 pm In reviewing our estate planning documents with our attorney, I asked what percentage of assets in wills/trusts people typically leave to charities/not-for profits upon their deaths. He replied that most leave nothing to such organizations; that most people leave the entirety of their estates to children and other relatives.
...
Some do. Most probably don't. If clients want to provide for charity, we encourage them to do it through their IRAs rather than in their Wills to save income taxes. If they do it that way, it won't be in the Will.

Some wealthy clients have already given substantial amounts to their family during lifetime, and leave substantial amounts to charity in their Will. A charitable lead trust works well in those cases since you can get a charitable deduction for 100% of the amount passing to the charitable lead trust.
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Re: Charitable Bequests, How Widespread?

Post by CaptainT »

First, most people don't have much if any estate when they die. I read something recently that 1/4 of 65 year olds have no( or less then 15k retirement savings. )
Second, those who do have money to retire on often want to pass it to the next generation.
Third, there is a joy in giving to charity with a warm hand. Seeing the impact is fantastic

Fyi my money is for retirement and right now if I die will got to neices and nephews.
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Strider
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Charitable Bequests, How Widespread?

Post by Strider »

OP here. Thanks to all who replied. This discussion has been very instructive.

Leaving aside those who have little or no estate to pass on, many who have replied prefer to support charities/not-for-profits while they are still alive rather than after they have died. Certainly the personal satisfaction one will derive from this approach is important.

In my case, I have a retirement nestegg that will likely be enough to cover me and my spouse under most circumstances. But I am terribly apprehensive about dealing with a life-changing event (e.g., the need for long-term care, a catastrophic illness, and the like). Under such a scenario, supporting charities/not-for-profits after we are gone seems the only real alternative.

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Re: Charitable Bequests, How Widespread?

Post by White Coat Investor »

Strider wrote: Fri Aug 12, 2022 12:03 pm In reviewing our estate planning documents with our attorney, I asked what percentage of assets in wills/trusts people typically leave to charities/not-for profits upon their deaths. He replied that most leave nothing to such organizations; that most people leave the entirety of their estates to children and other relatives.

I find this hard to believe. Perhaps his sample size is small (unlikely, since he has practiced law for many years), or perhaps the demographic he deals with falls into this category.

My spouse and I are leaving the bulk of our estate to relatives, but also a small percentage to educational/environmental/religious organizations.

I am curious how many fall into each category (keeping in mind that Bogleheads are not a typical cross-section of society).

Strider
I believe it. Try raising money for a charitable cause some time. You'd be amazed how few (even people of great means) give much at all.

We expect to leave more to charity than our heirs but I've learned we're pretty unusual. We also have enough that we don't dare give it all to our kids. Plus charity is important to us. We give more now than we spend, which is also pretty unusual it seems.
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Re: Charitable Bequests, How Widespread?

Post by Weathering »

Lee_WSP wrote: Fri Aug 12, 2022 2:14 pm
TomatoTomahto wrote: Fri Aug 12, 2022 1:11 pm
Weathering wrote: Fri Aug 12, 2022 12:59 pm A family friend (lifelong surgeon) left to their life partner all they would need to live out their life (there were no children), with the remainder going to a charitable organization. Upon the death of the family friend, the charitable organization immediately sued the life partner to get their funds quickly instead of waiting for the partner to pass. The partner then had to estimate how much they would need to live out their life (they were age 62 at the time), which was challenged several times by the charitable organization. In total, it caused two years of grief for the partner of our family friend before the matter was settled. This soured me against ever considering such an open-ended bequest. I'm just saying to make sure all the details are known and communicated before passing so there aren't unexpected events when it is too late to do anything about it.
Would a clause saying that the charitable donation evaporates if the will is contested work? Of course, if you anticipate such an event, you probably don't leave it to the charity in the first place.

Probably should have left everything to life partner with a request to fund charity upon partner's death.
I have no idea what the circumstances surrounding the estate plan were, but forcing an early buyout of a life estate is rare IMO and not exactly forced, forcing an early end to a trust as the remainder beneficiary is unheard of to me. But, I don't do litigation.
This week while visiting family, I got more details of the charitable bequest gone wrong. The family friend had been involved with the charity for 20+ years (it was the local diocese of a worldwide religion). The charity offered a lawyer (volunteer for the parish) to help with his will and to serve as executor at no cost. The life partner was supposed to get, from the estate, all he would need to live out his life, with the remainder going to the church/charity. I don't know the exact wording of the will or mechanisms used (e.g., trusts). The result was a terrible disaster for the life partner (who followed a different religion, but I don't see that as meaning anything in this context) because the church/charity kept declining his requests for funds as not being "essential." Can you imagine having to go to an entity to ask for your rightful money (e.g., I need to pay my mortgage, utilities, car payment, monthly donation to my religion, go out to dinner once in a while), and every dollar they give you is one less dollar they can keep for themselves? This was resolved through the courts two years after the death of the family friend. Since then, his life partner lives a modest lifestyle (12-year-old Toyota Camry, downsized to a one-bedroom apartment from their 3,700 sq ft estate in HCOL area, etc).
bsteiner
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Re: Charitable Bequests, How Widespread?

Post by bsteiner »

Weathering wrote: Thu Aug 25, 2022 9:55 am ...
This week while visiting family, I got more details of the charitable bequest gone wrong. The family friend had been involved with the charity for 20+ years (it was the local diocese of a worldwide religion). The charity offered a lawyer (volunteer for the parish) to help with his will and to serve as executor at no cost. The life partner was supposed to get, from the estate, all he would need to live out his life, with the remainder going to the church/charity. I don't know the exact wording of the will or mechanisms used (e.g., trusts). The result was a terrible disaster for the life partner (who followed a different religion, but I don't see that as meaning anything in this context) because the church/charity kept declining his requests for funds as not being "essential." Can you imagine having to go to an entity to ask for your rightful money (e.g., I need to pay my mortgage, utilities, car payment, monthly donation to my religion, go out to dinner once in a while), and every dollar they give you is one less dollar they can keep for themselves? This was resolved through the courts two years after the death of the family friend. Since then, his life partner lives a modest lifestyle (12-year-old Toyota Camry, downsized to a one-bedroom apartment from their 3,700 sq ft estate in HCOL area, etc).
I've seen this happen.

A lawyer provided by the principal beneficiary may not be the best choice.
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Lee_WSP
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Re: Charitable Bequests, How Widespread?

Post by Lee_WSP »

Weathering wrote: Thu Aug 25, 2022 9:55 am
Lee_WSP wrote: Fri Aug 12, 2022 2:14 pm
TomatoTomahto wrote: Fri Aug 12, 2022 1:11 pm
Weathering wrote: Fri Aug 12, 2022 12:59 pm A family friend (lifelong surgeon) left to their life partner all they would need to live out their life (there were no children), with the remainder going to a charitable organization. Upon the death of the family friend, the charitable organization immediately sued the life partner to get their funds quickly instead of waiting for the partner to pass. The partner then had to estimate how much they would need to live out their life (they were age 62 at the time), which was challenged several times by the charitable organization. In total, it caused two years of grief for the partner of our family friend before the matter was settled. This soured me against ever considering such an open-ended bequest. I'm just saying to make sure all the details are known and communicated before passing so there aren't unexpected events when it is too late to do anything about it.
Would a clause saying that the charitable donation evaporates if the will is contested work? Of course, if you anticipate such an event, you probably don't leave it to the charity in the first place.

Probably should have left everything to life partner with a request to fund charity upon partner's death.
I have no idea what the circumstances surrounding the estate plan were, but forcing an early buyout of a life estate is rare IMO and not exactly forced, forcing an early end to a trust as the remainder beneficiary is unheard of to me. But, I don't do litigation.
This week while visiting family, I got more details of the charitable bequest gone wrong. The family friend had been involved with the charity for 20+ years (it was the local diocese of a worldwide religion). The charity offered a lawyer (volunteer for the parish) to help with his will and to serve as executor at no cost. The life partner was supposed to get, from the estate, all he would need to live out his life, with the remainder going to the church/charity. I don't know the exact wording of the will or mechanisms used (e.g., trusts). The result was a terrible disaster for the life partner (who followed a different religion, but I don't see that as meaning anything in this context) because the church/charity kept declining his requests for funds as not being "essential." Can you imagine having to go to an entity to ask for your rightful money (e.g., I need to pay my mortgage, utilities, car payment, monthly donation to my religion, go out to dinner once in a while), and every dollar they give you is one less dollar they can keep for themselves? This was resolved through the courts two years after the death of the family friend. Since then, his life partner lives a modest lifestyle (12-year-old Toyota Camry, downsized to a one-bedroom apartment from their 3,700 sq ft estate in HCOL area, etc).
I see what happened.

As Bruce said, you never want to use the charity’s lawyer nor do you want the charity having any say in the beneficiary’s distributions.
delamer
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Re: Charitable Bequests, How Widespread?

Post by delamer »

Strider wrote: Sun Aug 14, 2022 11:33 am OP here. Thanks to all who replied. This discussion has been very instructive.

Leaving aside those who have little or no estate to pass on, many who have replied prefer to support charities/not-for-profits while they are still alive rather than after they have died. Certainly the personal satisfaction one will derive from this approach is important.

In my case, I have a retirement nestegg that will likely be enough to cover me and my spouse under most circumstances. But I am terribly apprehensive about dealing with a life-changing event (e.g., the need for long-term care, a catastrophic illness, and the like). Under such a scenario, supporting charities/not-for-profits after we are gone seems the only real alternative.

Strider
I share your apprehension. We have significant assets, but it’s not difficult to imagine a late-in-life scenario (dementia runs in both families) where our estate shrinks considerably. And, after our needs are taken care of, our first priority is helping our kids. So charitable donations now are pretty low. And mostly done anonymously.

If our adult children outlive me, there is one charity that gets a small fixed dollar bequest. Otherwise, everything is split between our kids.

Nothing to charity unless our children (and any grandchildren) don’t survive us. In that case, my husband and I have each identified a few charities that will receive equal portions of our estate. Interestingly, there is no overlap between his charities and mine. :?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
nigel_ht
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Re: Charitable Bequests, How Widespread?

Post by nigel_ht »

White Coat Investor wrote: Mon Aug 15, 2022 12:01 am
Strider wrote: Fri Aug 12, 2022 12:03 pm In reviewing our estate planning documents with our attorney, I asked what percentage of assets in wills/trusts people typically leave to charities/not-for profits upon their deaths. He replied that most leave nothing to such organizations; that most people leave the entirety of their estates to children and other relatives.

I find this hard to believe. Perhaps his sample size is small (unlikely, since he has practiced law for many years), or perhaps the demographic he deals with falls into this category.

My spouse and I are leaving the bulk of our estate to relatives, but also a small percentage to educational/environmental/religious organizations.

I am curious how many fall into each category (keeping in mind that Bogleheads are not a typical cross-section of society).

Strider
I believe it. Try raising money for a charitable cause some time. You'd be amazed how few (even people of great means) give much at all.

We expect to leave more to charity than our heirs but I've learned we're pretty unusual. We also have enough that we don't dare give it all to our kids. Plus charity is important to us. We give more now than we spend, which is also pretty unusual it seems.
You know what’s really weird? Some charities don’t do a whole lot as a thank you and are a PITA to find info as an executor.

Yes, they’re dead but you know engraving a name on a wall no one ever looks at is cheap. As is giving the descendants a quick tour of whatever.

A couple charities got crossed off my list of potential bequest recipients. I think one didn’t even bother to offer condolences and correspondence was essentially “where’s our money?”

I dunno…you’d think if someone’s parents had a tradition of charity that there might be higher odds their kids might too.

Maybe these charities have statistics that say “Not so much”…but it was so bizarrely weird compared to my alumni association who often sends me random swag (stickers, magnet, a hat once) I generally don’t want but hey, it still keeps them in mind.

I’m thinking about putting the kids in charge of the charitable giving…it’s small amounts right now anyway.
barnaclebob
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Re: Charitable Bequests, How Widespread?

Post by barnaclebob »

I probably wont be leaving anything to a charity in my estate and will instead donate while alive.
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celia
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Re: Charitable Bequests, How Widespread?

Post by celia »

Weathering wrote: Fri Aug 12, 2022 12:59 pm A family friend (lifelong surgeon) left to their life partner all they would need to live out their life (there were no children), with the remainder going to a charitable organization. Upon the death of the family friend, the charitable organization immediately sued the life partner to get their funds quickly instead of waiting for the partner to pass.
Are you able to name the charity so we can avoid them, if we want (or at least what the stated mission is for the charity).
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