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Monday, December 14, 2009

Giving land to charity in your Will

I had a really interesting question from a client today. The client owns an acreage, and very generously wants to donate the land to her church in her Will. She wants it to be used for a camp or home or other activities, rather than having it sold and the money used for church activities. This seems like a simple request, and I've heard several like it over the years.

However, this kind of gift needs careful thought.

What if the charity doesn't do the kind of work or activity the donor has in mind, or is in the process of winding down that kind of activity? If the gift can only be used for that specific purpose, the charity is going to have two choices. One, they can refuse to accept the gift, in which case the donor not only loses any tax deduction she would have gotten from making the donation, but the gift is now going to go to someone she hadn't wanted.

Two, they can accept the gift but never do anything with it, carrying the costs (such as property tax) for many years while the land sits idle. Donors rarely give money along with the real estate in a sufficient amount to allow the charity to support the property. This isn't thoughtlessness; it stems from a genuine desire to see a beloved property put to good use.

Unfortunately neither of the two choices seems anything like what the donor envisioned.

Perhaps a way of mitigating this problem is to set out the purpose the donor wants in the Will, but put a time limit on it. For example, the Will could say that if the charity wasn't able to use the gift for the stated purpose within ten years, it could be sold and the money used for other charitable purposes.

If you are considering giving real property to a church or charity, it is definitely worth your while to talk to an estate planning lawyer about it, or to call or visit the charity of your choice to discuss how they could use your gift. They will appreciate your generosity but might also be able to give you practical ideas about how to make it work.

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