Charities receive some of their largest gifts upon the passing of a benefactor. While this is a kind gesture on your part, if you live in New York you should leave money to your preferred charity using any method other than your Will.
Probate is Annoying: Probating a Will requires New York’s involvement, meaning Probate can be an expensive, tedious and slow process. You will need to both place the charity on notice that they are a beneficiary under the Will, send them their funds, and procure a Release from the charity. All of this takes time, meaning an attorney is billing for all of this.
Attorney General’s Involvement: As if New York’s courts weren’t inefficient enough for your tastes, New York’s Attorney General must also be placed on notice if a charity is a beneficiary under the Will, and must receive a satisfactory accounting to release the Executor if the charity is a residual beneficiary (even if they are only receiving 1% of your left-over probate assets). If the AG doesn’t like an informal accounting, you may need a formal Judicial Accounting, which will cost you more than Christmas gifts for your extended family. This AG release is not necessary if you leave a lump-sum to the charity, but most people prefer to leave a percent of their estate, so they better assure family members will receive money from the estate.
Charitable Audits: Charities often follow up on gifts they have received several months after an estate has been closed, meaning a third party often audits random bequests to ensure their desired amount has been received. While this is not an issue for the client – billing has ceased at this time – it is a hassle for the estate’s attorney, who may not make this a priority issue, since he is not being paid for it. Alternatively, an attorney may ask you for additional charges if there are several charitable beneficiaries and he expects these audits.
Employees Move On: Lastly, since a charity is an employer and not a person, your point of contact may have moved on during the probate process, meaning legal fees must be paid for the law firm to establish contact with a replacement employee to finish charitable affairs.
It you want to leave money to a charity, there are more-effective ways than doing it through Probate. Better to name the charity as a sole beneficiary on a life insurance or retirement plan so all that is needed to effectuate the transfer is an original death certificate. Keep things simple and stay away from charitable distributions under your Will.
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