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The Case of the Shifty Executor

Picture this: you’re the Executive Director of a small charity and you’ve just been notified that your charity

Picture this: you’re the Executive Director of a small charity and you’ve just been notified that your charity is a beneficiary to an estate. The will indicates that you are among three beneficiaries of the estate; the other two being the donor’s sister and a close friend. The sister is the executor of the estate.

Weeks go by and you realize you have not received an inventory of the donor’s assets so you follow up with the executor. To your dismay, she gets defensive, claims she has no time and can’t be bothered. She hangs up the phone on you. The donor’s friend, who is also named a beneficiary, gets in touch with you and provides an inventory of assets based on her memory. She says that as it stands, there is little left because the sister has been giving away and selling everything that was in the donor’s house – thereby, not following the instructions in the donor’s will.

Even sadder still, the friend confides that the donor had requested to have her ashes flown back home to France to be scattered but the sister refuses citing financial reasons.

You may think this is something completely made up but, sadly, no it’s not. This is an actual case currently happening with one of my clients. During our discussion about this and another contentious legacy they’ve received, the conversation started revolving around the role and responsibilities that charities have towards the donor’s estate.

There’s a particular behaviour that can be observed from charities when they receive a notification of a legacy: they are undeserving. Happy to even have received a gift at all, the charity may accept the terms, sign the release and then wait for the donation to arrive in the mail.

Of course, no charity wishes to appear ungrateful and risk receiving negative publicity so they ignore their legal rights to the estate. Meaning that once the charity accepts the gift and the terms outlined in the donor’s will, it’s now entitled and responsible for the gift.

But here’s the problem. While testamentary freedom (the freedom of individuals to dispose of their property upon death as they see fit) may be fairly understood by most, it’s important to point out that charities must understand that they not only have a legal right to the gift, but they also have a moral obligation to uphold the wishes of their deceased donor while at the same time upholding their fiduciary duty to manage resources for their charitable purpose.

In practical terms, what does this all mean? Here are a few things:

  1. Take the time to read through the entire will;
  2. Carefully review all the documents you receive from the executor or lawyer;
  3. If an inventory of assets was sent with the legacy notification, review every single line item;
  4. If there are other charities named as beneficiaries, reach out to them (especially if you feel you have less experience than the other charities);
  5. Do not be afraid to ask questions and to challenge things;
  6. Only when you are satisfied with the terms of the gift and the administration of the estate up to this point, you can then sign the release indicating your charity accepts the legacy;
  7. As the estate proceeds with settling everything, stay on top of things by requesting periodical updates from the executor;
  8. If you’re dealing with a lay executor and you have experience with this, offer support;
  9. Once you receive the final instalment, make sure to carefully review the final inventory and balance sheet before signing the final release. Once that’s signed, the charity no longer has any legal recourse should you discover something after the fact.

So what will happen to my client’s legacy gift? Time will tell but for now, they have retained the services of an estate lawyer who will investigate to discover if fraud or theft has been committed by the donor’s sister. Stay tuned!

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