Often in our practice, we have individuals that have some charitable intent. Their desire to create a benefit for charities can range from relatively simple gifts to their alma mater or other nonprofit institutions to very elaborate and long lasting arrangements designed to benefit charities. Especially in the area of donations to charities, it is critical to provide for flexibility. The reason this is so is that that the charities involved oftentimes will receive the benefit many years after the creation of the instrument providing for the same and oftentimes, one or more elements of the arrangement as designed may not age well with the passage of time.
Even in the case of outright donation for a specific purpose, it is well to provide that once that purpose is accomplished, that either the funds can be converted to the general use of the organization, or if they are to be redirected, the conditions under which this takes place should be specified.
For planned giving arrangements, especially if funds are held in trust for some period of years, flexibility with respect to such trust is critical. Among those things charitable donors should consider is vesting in the trustee ability to reform the trust as necessary to accomplish their purposes, the ability on the part of the trustees to make changes in the charitable recipient in order to prevent the frustration of the donor’s intent, and the ability to make appropriate changes as to which trustees will administer an arrangement of this sort.
It is far more commonplace than our clients might imagine, that disputes will arise as a result of failure to define with some specificity what a donor intends and how a charity can and should conduct itself in order to be a receipt of a donor’s beneficence. We have seen over the course of a number of years, significant litigation by and among charities vying for an interest in gifts made by our clients, violation by charities of the restrictions placed on gifts by our clients, attacks by charities on trustees who were selected by donors in a variety of circumstances, as well as significant frustration of the donor’s intent as the result of changes of circumstances and changes in organizations.
These difficulties arise because it is virtually impossible to predict how the future will play out. For that reason, assumptions about the existence of charities, how they will be managed, and a whole host of other concerns are often not taken into account when planning for a charitable donation. The watchword here from a drafting perspective is to provide as much flexibility as possible in order to accomplish the intent of the donor.
Step 1 is to lay out the intent of the donor as specifically as that individual can articulate it and describe the actual gifts to charity as a means to the end of accomplishing that intent. Step 2 is to build as much flexibility into the instruments as possible so that adjustments can be made by trustees in order to accomplish the intent of the donor. Finally, a clear statement of the individuals or entities who are to control the arrangement and how they may be selected and terminated should be a part of any such planning. Based on our experience with these matter, we at Wolcott Rivers Gates are well able to assist you in designing these arrangements in order to accomplish what you intend to accomplish rather than leaving to chance the results which might be obtained as a result of your charitable intent