This month’s newsletter comes to you courtesy of my dear friend Colleen DeJager, who is about to retire as Director of Planned & Memorial Giving for London Health Sciences Foundation, where she has been working for the last 12 years.
Prior to this, Colleen started her career as a professional Trust Officer, and worked for a few of the larger trust companies in Canada. This dual background has given Colleen some unique insights into both managing estates where charitable gifts are involved, and being on the receiving end as a Charity. I’ve had the honor to present with Colleen a number of times at conferences and training sessions over the years, and very much value her perspective on the intersection of Estates and Charities.
Colleen is retiring shortly, but she’ll still remain active, doing some part-time consulting work for charities on their planned giving programs over the next few years. She is also a faculty member for the Canadian Association of Gift Planners (CAGP), helping to train fundraisers across Canada in the art and science of planned giving.
Colleen was kind enough to sit down with me in my office a few weeks ago and graciously allowed me to interview her to share her insights as she moves into retirement. Her answers below are based on both her personal and professional experience, and are not necessarily the view of any of her past employers.
Congratulations on your retirement Colleen! Now that you have been on both sides of the charitable giving equation, (both as a Trust Officer administering estates and as a charity representative), what are the key things you would like to let our readers know from your experience?
Colleen: I think the key thing I would suggest is that you need to talk to the charity if you are planning to support them through a bequest or other future planned gift. There are all kinds of examples of where people have only talked to their planner or advisor and have failed to explore the charity enough to ensure their gift will actually work within the charity’s agenda or mandate, to understand that the legal name of the charity is accurate and even to confirm the organization’s charitable registration number which can be very helpful in ensuring the gift goes to the right organization.
Secondly, it is very important to make sure the language in a will or gift is very clear. I have seen situations where charities have been able to quietly agree amongst themselves to settle confusing bequest terms in wills in order to avoid having to approach the court for a formal decision. Usually this is where bequest wording has not been clear or the charity has been misnamed significantly enough to create confusion as to the Testator’s true wishes. Most often however, court input is required. In a few cases, the will wording almost implied that there were two charities, when everyone involved was certain the donor intended to make a gift to only one organization. As a result, a legal process was required to determine which charity the donor might have meant, creating additional cost to the charities and the estate in both time and money. I have seen costs going into the tens of thousands of dollars where the residue of an estate is unclear due to poor or incomplete will drafting, and the matter has had to be brought before the courts for a decision.
How often have you seen problems where charitable bequests have required court intervention?
Colleen: The percentage of estates that involve litigation is relatively small. Where you can potentially run into trouble is where the testator did not adequately provide for their spouses, children and/or other dependents and there laws in place to protect against this. In such cases, legal direction is required through the courts in order to ensure all interests are protected, which costs time and money to the detriment of all involved. Sometimes it is simply a typo in the will that causes enough confusion as to the testator’s wishes that asking a judge to decide is justified. So litigation isn’t always a negative thing – sometimes it can be positive where it clarifies the unclear. It’s just costly, both in time and money, so it’s important your will is drafted as clearly as possible at all times. Importantly, using the “will kits” that are commercially available online or in stores in order to save the few hundred dollars it costs for a properly drafted and legally valid will, can cause a great deal of trouble for your executor and beneficiaries after you are gone, often negating your intentions completely. As with drafting a proper will, if a will does end up in court it is important to hire a solicitor or litigator who specializes in estate law.
In your opinion, how should people work with their financial, legal and tax advisors to set up a gift from their estate to minimize problems?
Colleen: Make sure the advisor you are working with is willing to take the time to sit down with you and understand what it is that you want to accomplish with your philanthropy, and then work with you to achieve that goal. Often, advisors who are philanthropic themselves will invest extra time to ensure they understand the depth of what the client/donor actually wants to achieve and then ensure that happens. Advisors who possess this philosophy will enrich their relationships with their clients tenfold.
What do you suggest when it comes to picking an executor for your estate?
Colleen: When choosing your executor you want to make sure that they are willing to do it. Make sure they are up for the job – it’s not an easy job. A lot of people think it is an honour to be named an executor, but in reality it is a big, big job that comes with a lot of legal obligations and responsibility. The fiduciary responsibility of an executor is one of the highest legal expectations in our land and as such, is taken very seriously by the courts. Executors can’t make mistakes, and there are significant and costly ramifications both personally, and to the estate, for not doing the job properly.
Ideally, you want to appoint an executor who is young enough to outlive you, and you should have at least one backup executor named in the will in case your first choice is unable or unwilling to act after you have passed away.
If you don’t have any family or friends who would be up to the task, you can also appoint a lawyer but again, make sure you name an estate specialist. Non-specialized lawyers may not have the necessary experience and expertise to work in this tricky area. Personally, I’m a big fan of corporate executors like trust companies who handle estates on a daily basis. Their staff are highly-trained specialists and trust companies will always be around, as opposed to individuals who can die, move away, or retire.
Thank you Colleen for sharing your personal insights with us. Enjoy your retirement!
Colleen: You are most welcome – it has been my pleasure!