Charity Is Nice, But It Requires Good Estate Planning
Charitable planning is a wonderful part of estate planning that can allow a person to pass on a legacy of benefit to those in need. However, failing to plan properly for this giving can lead to legal issues for both the charities you intend to help and your family members whom you may intend to leave the bulk of your estate to. Here’s an example of the messy situations that may arise.
Charity Sues Trust Over Use of Funds
An issue arose for a man who executed his estate planning all the way back in 1967. A trust was formed that gave the man’s grandson a $100/month payout for as long as he lived. There was also a stipulation that would allow the trust to provide the grandson with additional funds for special situations like medical bills, accidents, and other cases of “dire need.”
The grandson dipped into the trust for such a case of “dire need” in 2009 when he went through a divorce. The trustee approved more than $160,000 in disbursements. So far everything seemed to be working as intended, but there was one catch.
Several charities were to share what was left in the trust when the grandson eventually died. These charities had already been waiting for 50 years, and one in particular was not happy that $160,000 was going on a divorce, disagreeing with it being a case of need that the trust should pay for. The case has bounced between state and federal courts and was back in a California court as of January 2017. No doubt this was not the way the man who left behind the estate wanted things to go, with more and more of the trust’s money ending up going to lawyers and court fees.
Protect Your Trust with Good Estate Planning
By planning one’s estate carefully, it is possible to provide for descendants and also for charities to benefit fully from assets without a legal battle. Petrov Law Firm specializes in estate planning, and our attorneys can help you to plan effectively for various situations that may arise in the future. Call 619-344-0360 to get started.
