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Estate Gift Records -- Tertiary Beneficiaries and Anonymous Estate Gifts

  • 1.  Estate Gift Records -- Tertiary Beneficiaries and Anonymous Estate Gifts

    Posted 09-08-2023 04:56 PM

    Hi friends,

    Our institution just started using FreeWill to generate interest in estate and other types of gifts that are offered through their platform. We have received 1 notification of a Will being created wherein our institution is listed as a tertiary beneficiary, and we also have another such promise on file (in the form of a notification letter), but I'm not really sure how to record or track this kind of pledge. Since it's entirely contingent on other beneficiaries expiring before the donor does, my question is do we even record it at all? What do you all do?

    In addition to the above, I have just received word that we have another estate gift in which we are listed as a primary beneficiary, but the donor name is anonymous. In this case, would you all create a dummy account just for the purpose of recording the pledge of this gift, or would you leave it unrecorded and just record it as a cash gift when the distribution eventually arrives?

    For context, we are using DonorPerfect, so there is a lot of advancement services functionality that isn't intuitive in our system.

    Thanks for the help!



    ------------------------------
    Melissa Rufener
    Life Pacific University
    mrufener@lifepacific.edu
    ------------------------------


  • 2.  RE: Estate Gift Records -- Tertiary Beneficiaries and Anonymous Estate Gifts

    Posted 09-08-2023 07:17 PM
    Prepare for a long answer :-)

    Bequests are revocable. That means even if a donor names you in their will, there is no guarantee you will remain a beneficiary.

    In a study published in 2020 of 700 decedents who indicated they had named a charity in their will, only 65% of those charities received a penny. The "lost rate" varied from 17%-60%, averaging out to the 35% lost rate.

    In another survey of individuals who intended to leave money to a charity, only 11% did.

    And, of 507 people who requested information regarding making a bequest to a charity, only 5% ever did.

    All this suggests that you must take a conservative approach to recognizing (counting) any bequest in your fundraising totals. This is why CASE advises that we should only count something if the donor will turn 65 during the reporting period and that the value be substantiated.

    I advise all of my clients to take this conservative stance. Further, they should only count something if they are the sole or co-beneficiary. That rule goes for your tertiary beneficiary. That means it is revocable twice removed :-).

    If it is a "second to die" policy between legal partners, it should not be counted unless the youngest of the two hits that 65 minimum.

    If you do not have a formal document attesting to your portion of the bequest, or if you are anything less than the primary or co-beneficiary, I would not record anything that "counts." I would note the existence of the expectancy in DonorPerfect in a way that can be easily reported on to ensure timely and consistent donor follow-up.

    As for your anonymous question, you could create an anonymous record, assuming you have enough legal backup to support recording the expectancy. However, I wouldn't do anything if I had only "received word." I would need a letter from an attorney or legal representative - or a copy of the redacted will - before recording anything. I would also include contact information on the anonymous record pointing to that agent or attorney who has let you know about the intention.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




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