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  • 1.  Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-21-2022 09:33 PM
    The following situation is a new one for our team & our office and I'm hoping you can help. I did look through the archives but didn't find a similar scenario.

    We received a check from a continuing care community "on behalf of" a recently deceased donor (with a bequest pledge at our University) and the notation "Entrance Fee Refund.".

    Who is the donor? 
    • The continuing care community
      • soft credit to - donor? estate?
    • The estate 
    • The deceased donor
    Is this a tax-deductible gift? 

    We have not had any communication from the estate, yet, and we have not yet created an estate record.

     I have learned Thank you for any insight!

    ------------------------------
    Maureen Aylward
    Associate Director of Advancement Services
    University of Mary Washington
    maylward@umw.edu
    ------------------------------


  • 2.  RE: Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-21-2022 10:06 PM
    I would ask the continuing care firm for a copy of the instructions the have directing them to issue the payment.  Please let us know what that says!  It should answer your question.

    John

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard



    Original Message


  • 3.  RE: Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-27-2022 09:26 PM
    John -

    Thank you! We have some answers and a few more questions.

    We contacted the retirement community who sent us a copy of the Designation of Beneficiary form listing us as the sole beneficiary.

    "In the event that a Refund becomes payable under the terms of the Agreement due to my death on or after my Designated Occupancy Date or actual date of occupancy, whichever is earlier, I HEREBY DIRECT AAI to pay or transfer the Refund at such time as the Refund becomes payable, to:
    A. ____ To my Estate.
    B. ✓To the individual(s) or organization(s) in the percentages named below. Beneficiary1 Percentage of Refund 100%

    We are inclined to treat this as a gift from this individual's estate in partial fulfillment of an existing bequest, although this direction bypasses her estate. But some have argued that the retirement community is the donor, with soft credit given to the estate/deceased donor. If the community is the donor, is this tax-deductible?
    The retirement community did not have a standard policy on these sort of distributions, having processed few of these refunds to institutions or organizations.

    Of course we hope to book this gift by Friday so it can be included in this quarter's numbers.


    ------------------------------
    Maureen Aylward
    Associate Director of Advancement Services
    University of Mary Washington
    maylward@umw.edu
    ------------------------------

    Original Message


  • 4.  RE: Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-27-2022 11:44 PM
    This sounds like a gift!

    You would need to ask the retirement center if, on their books, they are reflecting this as a return to the donor and they are serving as a pass-through.

    The language in the agreement is funky.  But since they stress the donors' direction, I would be inclined to record it on the donors' record.

    Even if from the retirement community, deductibility is irrelevant.  Nonprofit organizations cannot claim deductions for charitable gifts.  But that does not stop you from accepting and counting it!

    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





    Original Message


  • 5.  RE: Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-28-2022 10:27 AM

    Hi all.

     

    I have worked for a continuing care community organization and can tell you that when they state it is a return of entrance fee it means that they are refunding the "donor" a portion of his/her entrance fee based on the terms of the agreement.  There is usually a pro-rata amount based on the amount of time the individual actually lived at the community which expires at a certain time.  In other words.  As an example, if the entrance fee is $30,000 and if the donor leaves the community within one year, they will be refunded $20,000.  If within two years, then they will be refunded $10,000 and if after three years, there is no longer an amount to refund.

     

    So, without reading the contract, it seems most likely that this is a gift from the estate of the donor because they are refunding the donor's money.  It's just that the donor asked for any possible refund to be directed to your organization.

     

    Thanks, Dale

     




    Original Message


  • 6.  RE: Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-28-2022 10:52 AM
    Dale

    Thanks for sharing these details. It's so helpful to hear from those with experience!

    Maureen

    ------------------------------
    Maureen Aylward
    Associate Director of Advancement Services
    University of Mary Washington
    maylward@umw.edu
    ------------------------------

    Original Message


  • 7.  RE: Payment from a Continuing Care Community on behalf of a deceased donor

    Posted 09-28-2022 10:58 AM

    Thanks!
    The community has been very responsive, so I expect that they'll respond to this question soon.

    And thank you for the reminder about deductability - I am still new at this and learning with every transaction!
    These discussions have been incredibly informative!

    Maureen



    ------------------------------
    Maureen Aylward
    Associate Director of Advancement Services
    University of Mary Washington
    maylward@umw.edu
    ------------------------------

    Original Message


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