Wednesday, October 29, 2008

Accurately Naming Charities

I am coming across too many wills in which charities are not properly described. Sometimes the will sets out a gift to a specific program rather than the legal name of a charity. In other cases, the name is simply wrong.

This creates difficulties for executors. The executor has a responsibility for distributing gifts in accordance with the will. But if a charity is not properly described, the executor may not be assured that he is giving the gift to the right recipient.

For example, suppose that the will leaves a gift to a specific program for people with disabilities, rather than to a charitable organization. What if responsibility of the program is shared by two or three distinct organizations, each of whom has specific responsibilities. Perhaps one provides the building, and another offers courses. Which organization is entitled to the gift?

I wrote a previous post about a gift to "First Presbyterian Church in the City of White Rock," which unfortunately did not exist. The executor applied to the court, and the court had to decide which of three churches the testator intended to benefit.

When a court application is necessary, distribution is delayed, and less money is left for the beneficiaries.

These problems can be avoided by either the testator or his lawyer (or ideally both) taking the time to make sure that the charity is correctly identified. The best way is to telephone the charity and confirm the charity's correct legal description. If the testator is willing to provide information about the gift, perhaps on an anonymous basis, this helps the charity project its future revenue from gifts.

Other ways of identifying a charity include obtaining a brochure, checking the charities website, and, in Canada, checking Canada Revenue Agency's list of charities.

If the testator wishes the funds to go to a specific program, the will can set out both the name of the charity, and the specific program.

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