Can I include clauses requiring the charity to publish an annual impact report?

Estate planning is a deeply personal process, ensuring your assets are distributed according to your wishes and providing for loved ones—but it can also extend to supporting causes you believe in, like charitable organizations.

What Happens if I Don’t Have a Will or Trust?

Many people mistakenly believe that if they don’t have a will or trust, their assets will automatically go to their spouse. While that’s often true for community property—all assets acquired during a marriage are owned 50/50—separate property and specific bequests require explicit direction. In California, if you die without a will (intestate), the state dictates how your assets are distributed. This can mean unintended consequences and delays. Formal probate is required for estates over $184,500, and the statutory fees for executors and attorneys can quickly deplete your assets; typically ranging from 4% to 10% of the estate’s value. This also applies to charitable giving; without clear instructions, your desired philanthropic contributions might not happen.

How Can I Ensure My Charity Receives My Gift?

You have several options for including a charity in your estate plan. You can name them as a beneficiary in your will or trust, make a direct bequest of a specific amount or asset, or create a charitable remainder trust, which provides income to you (or another beneficiary) during your lifetime and then passes the remaining assets to the charity. It’s crucial to be specific with the wording. For example, instead of simply stating “I leave $10,000 to the American Red Cross,” you could state “I leave $10,000 to the American Red Cross, national headquarters, Washington, D.C.” This minimizes ambiguity and potential disputes. And yes, you absolutely can—and often should—include clauses requiring the charity to publish an annual impact report detailing how your gift was used and the positive outcomes achieved. This ensures transparency and accountability, aligning with your values as a donor.

What About Controlling How My Charitable Gift is Used?

While charities appreciate any donation, you can exert more control over how your gift is used by specifying its purpose. For instance, you could designate funds for a specific program, research project, or scholarship. However, it’s important to be realistic. Excessively restrictive conditions might discourage the charity from accepting the gift or make it difficult to fulfill your wishes. A well-drafted estate plan balances your desire for control with the charity’s need for flexibility. I remember working with a client, Arthur, who wanted to donate a significant portion of his estate to a local animal shelter, but only if the funds were used to build a state-of-the-art veterinary clinic. We worked with the shelter’s board to develop a plan that met Arthur’s vision while remaining financially feasible. This collaborative approach ensured his gift had a lasting impact.

What Happens if the Charity No Longer Exists?

It’s wise to include a contingency plan in your estate plan, addressing what should happen if the designated charity ceases to exist. You can designate an alternate charity or direct that the funds be distributed to a similar organization with a compatible mission. Another option is to create a private charitable foundation, which allows you to maintain greater control over how your philanthropic dollars are spent. This requires more administrative effort, but it can be a rewarding option for individuals passionate about specific causes. I once worked with a client, Evelyn, who learned after she had written her will that the cancer research hospital to which she planned to leave a large donation was on the verge of closing. Fortunately, we were able to amend her will to designate a similar institution, ensuring her generosity still benefited cancer research. Following the California Prudent Investor Act is critical for any trustee managing assets for charitable purposes, ensuring responsible investment and preservation of capital.

Remember, community property provides significant tax benefits—specifically, the “double step-up” in basis for the surviving spouse. If you’re considering including a charity in your estate plan, it’s best to consult with an experienced estate planning attorney like Steve Bliss. He can help you navigate the complexities of estate planning and ensure your wishes are carried out effectively.

Contact Steven F. Bliss ESQ. at (951) 412-2800 to schedule a consultation and start planning your legacy today.

Don’t leave your legacy to chance—plan it with precision and compassion. Let us help you create an estate plan that reflects your values and protects your loved ones and the causes you care about most.