Related Practice Areas
- Business Transition Planning
- Estate and Trust Administration
- Estate Mediation and Alternate Dispute Resolution
- Estate Planning
- Insurance Trusts
- Marital Agreements
- Medicaid/Medicare Planning
- Retirement Benefit Planning
- Ten Questions to Ask an Estate Attorney
- Trusts and Estates
- Will, Trust, and Estate Litigation
The Role of Charity in Your Estate Plan
We are very pleased to assist clients who plan to make gifts to charity as part of their estate plan. If that is your plan, you should be aware that the tax law supports charitable giving in several ways. We help establish charitable foundations and trusts, including both private and publicly supported foundations, and assist them with their tax or local law compliance issues thereafter. Cullen and Dykman represents or has strong relationships with Manhattan, Brooklyn, and Long Island charitable institutions and assist them and prospective donors to select the proper devices to obtain maximum tax advantages from a planned gift. Our close ties to the charitable institutions of New York are a product of over one hundred and fifty years of service to our community.
This is a sophisticated area of the law and careful attention must be given to the proper choice of gifting instrument you choose. Cullen and Dykman has over a century of experience in the use of planned giving and will be able to provide you with practical advice to give life to this important part of your intent.
Questions you should be asking:
- What is a charitable remainder trust and would it be useful for me?
- How do I decide to give now or to make a charitable gift part of my testamentary plan?
- What is a charitable lead trust and would it be useful for me?
- What are the income tax effects of donating appreciated property to a charity?
- What is a private foundation? Is it like a family foundation?
- Can I or members of my family be employed by my foundation?
- What is a donor advised fund?
- What control do I have to be sure that my gift to a charitable institution is used for the purposes set forth in my gift?
A case in point:
This last question of control is increasingly a source of concern, and there has been a change in the law on this topic. Traditionally, the descendants of the donor of a charitable gift had no ability to enforce the condition of the gift. Only the New York Attorney General had this power, unless the gift itself provided for oversight by the representative of the donor. Recently the law was changed so as to permit the donors (or their personal representatives upon their deaths) to challenge the use to which a charity has put the donated assets.
In Smithers v. St. Luke’s-Roosevelt Hosp. Ctr., 281 A.D.2d 127, 723 N.Y.S.2d. 426 (1st Dep’t 2001), the court allowed the donor’s family to enforce the actual use of the donor's charitable contribution according to his intent, after his death, by appointing Mrs. Smithers a fiduciary of her husband’s estate for this purpose. Here, Mr. Smithers left $10 million to St. Luke's to establish an alcohol rehabilitation center. After he died, the hospital decided to relocate the facility and sell the original property, with the approval of the Attorney General. Mrs. Smithers, the donor's widow, having been appointed as a fiduciary of his estate for this purpose, brought suit against the hospital, alleging a misappropriation of donor funds. The lower court denied her request because only the Attorney General had the right to make such a challenge. The appellate court reversed the lower court and changed the law to allow the donors of charitable gifts or their personal representatives to bring a suit to challenge the charity’s use of the donated assets.