When I was in private practice, I helped a family work through the basics of a will. There were no major estate tax issues; thus, the primary issue for the will was who their beneficiaries would be. Their first and obvious choice was to leave the majority of their estate to their children.
However, they also asked me to include a provision that would reserve 10% of their estate to go to their church. Notably, this family was a pillar within the church. When it came time for the final draft, however, they asked me to remove the 10% designation. They simply did not feel comfortable leaving 10% to the local church because they could not be sure of the future direction there. It was eye opening for me.
So what are some good ground rules as you consider leaving money to ministry by way of your estate? How will you know whether the ministry you want to support will still carry on the same set of values for the next 100 years?
Here are four principles:
1.Consider the existing leaders
Leadership is the first key. Are they humble? Are they willing to let others work alongside them? Humble leaders allow for successful transition. On the other hand, ministries built around the personality of one person have a difficult time making the handoff.
2. Consider the board
One of the critical elements for carrying out the vision, mission, and values of any organization is the set of trustees that will carry the values into the future. Is there a set of criteria that allows for new trustees or board members to be selected? Let’s face it—trustees can redirect a vision and mission.
3. Consider the bylaws
Ask to see the bylaws. Do the bylaws clearly define the vision, mission, and values? Do they provide the clear guardrails that trustees must follow in implementing the future direction? While there needs to be freedom to operate and to adjust to new opportunities, the vision, mission, and values should be unchanging.
4. Consider an intermediary
Once you make a direct gift to a ministry or church, it is a complete gift. And if the gift is through your estate, there is no way to adjust or redirect it. Accordingly, that is why some people use donor-advised funds as an intermediary. A direct gift can be made to a donor-advised fund with recommendations to give to specified ministries. This allows for some vetting of the current and future direction or organizations.
As you consider these four aspects, it is always wise to consult with a professional who is familiar with charitable planning strategies. As always, I invite questions or comments.
This blog is part if a series on “4”: 4 Questions, 4 Things, etc. It’s a way of offering concise commentary. Check out the rest of the series of “4”!
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Published September 28, 2017
Topics: Estate Planning