Cases of Interest for Bequest Managers in 2024
This is our second annual review of cases of interest to bequest managers. The period covered is 2023 (mostly from July onward) to mid-2024. The review is eclectic, not exhaustive.
Some of these cases have appeared in our popular “Bequest Bits” feature. Others have not. We have included the most accessible (at the time of publication) citation for each case for those readers interested in following any future developments.
We have provided simplified descriptions of the cases to highlight items of particular significance to the bequest management community.
Interested Persons and Standing
Who has the right to weigh in on an estate administration matter? The law labels this right as “standing.” Many standing issues are obvious. If John’s aunt unexpectedly leaves him out of her will, John’s neighbor cannot intervene in the probate case on his behalf. Other standing cases reach conclusions that are not so intuitive. This issue becomes relevant in a surprising variety of estate administration cases.
Altruism No Basis for Standing. Occasionally, a charity may desire to support another worthy beneficiary in a probate case to prevent injustice. (Very occasionally, such a charity may do so even at the risk of its own bequest.) Noble as such an impulse may be, empathy alone does not confer standing. In Matter of Est. of Kolesar, 27 Wash. App. 2d 166, 532 P.3d 170 (2023), two beneficiaries contested a will, thereby putting their own bequest at risk. The beneficiaries alleged that the will was procured through elder abuse by others and should not stand. Despite their principled position, the court dismissed the petition. The plaintiffs had nothing to gain and would lose if they won! Kolesar stands for the principle that indignation, outrage, and a general thirst for fairness, however admirable, does not confer standing.
Donor’s Estate Cannot Contest Repurposing of Bequest. A different twist on standing is evident in Matter of Robert T. Keeler Maintenance Fund for Hanover Country Club at Dartmouth College, 306 A.2d 795 (N.H. 2023). The decedent left a large bequest to Dartmouth for the maintenance of a certain golf course. Years later, the college closed the course and sought approval of the Attorney General to redirect the funds to other golf-related programs. Keeler’s estate (now reopened) intervened in the dispute, seeking recovery of the remaining funds from Dartmouth, claiming so-called “special interest standing.” The court ruled that the estate had no standing to participate in the case and approved the Dartmouth plan. This illustrates the typical “common law” approach to the question and is based on the principle that once a gift is completed, a donor relinquishes all “dominion and control” over its use.
WHY THIS ISSUE MATTERS: Cases like Keeler are problematic for charities. Win or lose, the optics of these disputes are often troublesome because denial of standing to representatives of the decedent unavoidably suggests disregard of the dead. In 2024, the Orlando Museum of Art is receiving unwelcome press coverage as it tries to modify a large, restricted bequest over the objection of the deceased’s elderly daughter, who is not a party to the proceeding. When possible, charities should persuade donors to write restrictions with some degree of flexibility to avoid the need for litigation to modify the purpose of a bequest. The law of standing in estate cases is in a state of flux because of the widespread adoption of the Uniform Trust Code (UTC) and the Uniform Prudent Management of Institutional Funds Act (UPMIFA). The UTC provides “special interest standing” in many instances to the creator (settlor) of a trust, and possibly to the representatives of a deceased donor. Some courts, and many charities, seem still to be unaware of the existence and/or significance of the UTC. For example, in Herbst v. Univ. of Colorado Found., 2022 COA 38, 513 P.3d 388, Herbst (a major donor) was denied special interest standing to sue the Foundation for breach of fiduciary duty. The denial was based on common law and in apparent ignorance of the already in-force Colorado version of the UTC. “Special interest” standing means that the potential litigant has such a unique connection to the issue, fairness demands her participation.
Restricted Gifts
Courts will sometimes modify bequest restrictions that are (or have become) impossible or impracticable. This is the application of a doctrine known as “cy pres,” from a French phrase meaning “as near as possible.” The law in this area is evolving. In some cases, courts strain to replicate the testator’s intentions as closely as possible; in others, modifications are designed to be merely consistent with the general tenor of the original bequest. The Keeler case, supra, is an example of the more relaxed approach.
Strict Adherence to Donor Wishes. A testator left her estate to eight charities, including two that were defunct as of the date of her death. One of those charities was concerned with preventing cruelty to animals. The other focused on international relief efforts. The court rejected a proposal to redistribute the lapsed bequests to the other six charities, none of which mirrored precisely the two in question. Instead, the appeals court ordered the lower court to “exhaustively explore charities and organizations to determine options that most closely resemble the [two charities’] original purposes.” The court reasoned that disregarding those two charities completely would ignore some intentions of the testator. Matter of Est. of Heinecke, No. A-3604-21, 2024 WL 1125186 (N.J. Super. Ct. App. Div. Mar. 15, 2024).
WHY THIS ISSUE MATTERS
Most charities have older endowments and similar funds subject to restrictions from decades – and sometimes centuries – ago. There are times when the restrictions no longer have the slightest relevance to contemporary needs. Under the strict cy pres doctrine of the past, modification can sometimes be quite challenging. Both the UTC and UPMIFA (see above) provide more liberal standards for modification of restrictions. For more information on this see our article on the cy pres doctrine.
FORMALITIES: RELAXED, BUT NOT GONE
Many American jurisdictions show an increasing willingness to relax the centuries-old formal requirements for creation of a valid will. Not surprisingly this liberalizing trend is also affecting “non-will” bequest instruments such as beneficiary designations and the like. However, the venerable “Statute of Wills,” the source of most of the formalities, is far from dead.
Will That “Testator” Neither Created nor Signed Admitted to Probate. A few decades ago, the case of Matter of Est. of Olson, 103 Mass. App. Ct. 842, 231 N.E.3d 970, review denied, 494 Mass. 1102, 235 N.E.3d 241 (2024) might have been quite shocking. It remains interesting. Ms. Olson had a caretaker and discussed her estate plans with him. Although she was competent, Ms. Olson’s infirmities made it difficult for her to participate in creating and executing a will. The caretaker created the will (based on Olson’s wishes) and signed it in front of witnesses. These activities all took place outside of Olson’s presence. Nonetheless, the court found it that the “will” reflected Olson’s wishes and admitted it to probate.
Lack of Testamentary Language Does Not Void Bequest Gift. A testator prepared a holographic will in which she specified gifts-at-death to various friends and family members. The will was awkward and disjointed and in one section she simply listed the addresses and current residents of some properties she owned. She may have wanted those residents to receive the homes as gifts. Other beneficiaries objected on the ground of lack of specific gift language. Nonetheless, the court assumed that Ms. Martinez intended to make those gifts. Otherwise, there would have been no point to include a roster of homes and occupants in the will. Est. of Martinez, No. 04-22-00708-CV, 2024 WL 697102 (Tex. App. Feb. 21, 2024).
Nonconforming Beneficiary Designation Still Effective. A doctor undertook to remove his former wife as beneficiary of a $300,000 life insurance policy and to name his children in her stead. Right after the divorce, he completed the required form and submitted it to the insurer but failed to sign it. At his death, the former wife claimed the policy proceeds. The kids lost their initial effort to claim the money when an appellate court ruled that an unsigned “change of beneficiary” is no change at all, especially since the form stated: “if you do not sign and date this page, we will not be able to process your request.” The Supreme Court of Arkansas agreed to hear the case and reversed, awarding the $300,000 to the decedent’s children. It did so based on a “substantial compliance” theory (sometimes called the “harmless error” doctrine) which is most frequently used to validate noncompliant wills and much less often for beneficiary designations. James v. Mounts, 2023 Ark. 53, 660 S.W.3d 801 (2023).
Signature in Wrong Place Invalidates Will. The decedent’s children produced a will that the decedent had not signed. He did sign the self-proving affidavit attached to the will. The witnesses signed both documents. The court denied probate on the ground that the testator did not sign the will as required by Tennessee law. The intermediate appellate court affirmed. In re Est. of Washington, No. M202201326COAR3CV, 2023 WL 4886935 (Tenn. Ct. App. Aug. 1, 2023).
Modification of Trust Requires More Than E-Mail. In Trotter v. Van Dyck, Mary Trotter (the settlor and decedent) sought to remove her adult stepdaughter as a beneficiary of a trust. She sent emails to her estate planning attorney outlining her wishes, but died before they could be incorporated into the trust document. Mary’s son, Timothy, was successor trustee and sought to give effect to Mary’s wishes and to exclude Van Dyck. The court refused, finding that the emails were insufficient to constitute a valid modification to the testamentary trust. Van Dyck received her inheritance. Trotter v. Van Dyck, 322 Cal.Rptr.3d 126 (Cal.App. 2024).
WHY THIS ISSUE MATTERS
If a charity is in danger of losing a bequest because of a noncompliant testamentary document, it may be worth consulting counsel to see if there is a good argument that the defect is excusable. But this is a jurisdiction-by-jurisdiction matter, as the Washington case shows. The Trotter case is a bit of a surprise. California courts have permitted various noncompliant documents to serve as will substitutes. That trustee Trotter prevailed is a good lesson that this area of the law is quite idiosyncratic.
CCK NOTE
Infrequently, a charity may have an opportunity to increase a bequest by advancing an argument about the validity of a will. For example, an organization could be in line for 25% of the residue of an estate under the latest will, but 100% under the previous will. If the later will has defects, it may be tempting to seek invalidation. In addition to the normal process of evaluating a potential litigation, a charity must be cautious to ensure that there is not a lurking “no contest” clause in one of the relevant documents. Violation of such a provision may deprive the charity of any portion of the bequest.
NO CONTEST PROVISIONS
Testators sometimes direct that anyone challenging a will forfeits his bequest. These provisions are rarely forbidden under state law, sometimes permitted under limited conditions, and most frequently “allowed” subject to a requirement that a challenge made in good faith will not be punished. Whether a particular objection meets the “good faith” test is a highly subjective determination and no beneficiary, least of all a charity, should risk loss of a bequest by filing a dubious challenge. “No contest” provisions still have teeth. Unfortunately, a beneficiary will often be unaware of the extent of that dentition until after a challenge is lodged. By then it may be too late. These cases are still unpredictable in the extreme as shown by two New York cases decided in late 2023.
Beneficiary Assumes Risk of Request for Clarification. The worried beneficiary in Application of Follman, 81 Misc. 3d 275, 197 N.Y.S.3d 682 (N.Y. Sur. 2023) was troubled by monetary transactions that had occurred during estate administration but was hesitant to request clarification because the trust contained a no-contest provision. So, he asked the court to make an advance ruling whether such a request would violate the clause. The trustee fought back with surprising vigor. He sought a ruling that the request for advice itself had triggered the provision and mandated the disinheritance of poor Follman! Though the court rejected the trustee’s aggressive position, it also refused to grant Follman the comfort he sought. Instead, it sent a strong signal that a filing for clarification might well trigger the no-contest penalty.
What Contest? Matter of Aoki, 221 A.D.3d 479, 199 N.Y.S.3d 52 (2023) is another case involving a no-contest clause. Here, the beneficiaries went much further than the cautious Follman. They (1) asserted claims against the trust in an accounting proceeding; (2) initiated litigation for construction of the will; and (3) sought judicial removal of the trustee. The trustee sought, and failed, to invalidate all bequests to the litigating beneficiaries. Citing an assortment of statutory and “public policy” references, the court concluded (correctly) that punishing good-faith questioning of the administration of an estate would amount to a grant of immunity to executors and trustees. Such immunity, of course, works to the detriment of the goals of the probate system. Nonetheless, many courts would have considered the beneficiaries’ activity to constitute a contest.
WHY THIS ISSUE MATTERS
It comes as no surprise that surviving family members sometimes resent a decedent’s charitable bequests. Absent compelling circumstances, it is unwise for a charity to initiate a will contest, or any proceeding that may look like one. At a minimum, demands or objections should not be filed without careful consideration of consequences and, if the case warrants, consultation with experienced probate counsel. Often, a charity’s concerns/questions may also be troubling to other beneficiaries. In most cases, “watchful waiting” (and even a little behind-the-scenes prodding) may result in another beneficiary raising the desired issue. (This is the bequest management equivalent of the economic theory of the “free rider.”)
INTERPRETING WILLS: WHAT SHOULD WE DO?
That age-old question arises in a surprising number of probate cases. The answer? The same as for any dilemma of existential significance: “It depends.” Three recent probate cases tackle the problem.
Innocent Mistake. In Est. of Biddle v. Biddle, 369 So. 3d 525 (Miss. 2023), Biddle’s sons challenged his will, claiming undue influence by his second wife (of twenty-seven years). Their unsuccessful case, based partially on the presence/absence of staple holes, pointed to the (slight) misspelling of relatives’ names (“Bains” rather than “Baines” and “Katherine” instead of “Kathryn”) as evidence of their father’s testamentary incapacity. The Supreme Court of Mississippi wisely disposed of the challenge and gave effect to the will.
Troubling Mistake. Courts are not willing to overlook all name-related mistakes. Paramount among these is the testator’s own name. The case of Shorter v. Cherry, No. 1904-22-4 (Va.App. 2023) vividly illustrates that fact. Cherry executed a will in 2002, leaving her estate to her children. Sometime thereafter she met Shorter, a known liar. At Cherry’s death, he proffered a very recent will naming – you guessed it – himself as the primary beneficiary. The Shorter forgery was exposed by many errors, most notably that the testator’s “signature” was lacking several letters of her own name!
Forced Mistake. Joseph wished to leave money to his stepdaughter. Joseph wished to leave a bequest to his step-child (Katelyn) and specifically included her in his will. Later, he divorced Katelyn’s mother, but wanted the bequest to stand, and did not change the will. All done? Not by a long shot. It turns out that a Michigan statute defines “stepdaughter” to exclude the children of former spouses. Joseph did not know that. Should the probate court have honored Joe’s undeniable wishes? Or should it have invalidated the bequest to Katelyn? In re Joseph & Sally Grablick Tr., 512 Mich. 890, 993 N.W.2d 401 (2023) is a case where the Michigan Supreme Court (with reluctance) gave effect to the statute and left Katelyn empty-handed.
CCK COMMENT
Mistakes in estate documents can be opportunities or land mines for charities. It is worth reading wills closely to identify issues that may portend benefit or risk for your organization. Suppose your charity is the residuary beneficiary in Grablick. Should the bequest manager fight aggressively to divest Katelyn of her bequest? Tough question.
Absent unique circumstances, most humans do not make mistakes about their own names. Such an error merits immediate investigation. The German philosopher Ludwig Wittgenstein noted that knowledge of one’s own name is at least as infallible as the conviction that “one has never been to the moon.” Bequest managers, take note. Examine signatures carefully for consistency with earlier exemplars (if available), spelling errors and for shaky penmanship. The shakiness may be related to old age, but it is also a marker of the slow writing of an amateur forger.
NON-CASH GIFTS
Charities do receive a considerable number of noncash bequests. These bequests can present interesting and challenging problems to the bequest manager, as the following recent cases demonstrate.
Is A Bequest From 1962 Headed to the Supreme Court? In 1916, Karl Adler, a German national, purchased Picasso’s Woman Ironing (Painting) from a dealer in Munich. In 1938, as the Nazi massacres became a daily threat to the Adlers and other Jewish families, he traveled to Paris and sold the Painting to Thannhauser for US $1,500.00. Adler needed the money to escape from Germany and relocate his family. Adler died in 1957, leaving his estate in equal shares to his three children. Thannhauser, who had emigrated to New York, died in 1963 and bequeathed his substantial art collection, including the Painting. The bequest was widely publicized, with an image of the Painting appearing in the New York Times. During subsequent decades, the Guggenheim corresponded with the Adler children about the history of the painting. During that time, the Adlers made no claim to ownership.
In 2013, Thomas Benningson, a descendant of Karl Adler, became aware of his family’s former ownership of the painting and the circumstances of its sale to Thannhauser. Ten years later, he launched a lawsuit against the Guggenheim, alleging, among other things, conversion, and unjust enrichment. The Painting is now worth between $100 million and $200 million. In 2024, the Supreme Court of New York decided the controversy in favor of the Guggenheim, primarily on the grounds of delay by the Adler family. The court was also aware of the relevance of the federal Holocaust Expropriated Art Recovery (HEAR) Act, the purpose of which is to restore Nazi-looted art to its rightful owners. Nonetheless, it noted that HEAR does not preclude a dismissal based on delay. Furthermore, it was also clear that the Nazis played no direct role in Adler’s bargain sale of the Painting. Notably, the Guggenheim had conducted extensive research to confirm the provenance of the piece.
A number of charities joined Benningson as plaintiffs in this case, and it would not be surprising if the matter wound up at the New York Court of Appeals or even at the Supreme Court of the United States (for an interpretation of various portions of the federal HEAR Act). There are nonfrivolous arguments that HEAR may be sufficiently broad to address the Adlers’ plight. Nonetheless, the Supreme Court will not be blind to the delay issue (known legally as “laches”).
Bennigson v. Solomon R. Guggenheim Found., No. 650416/2023, 2024 WL 2872552 (N.Y. Sup. Ct. June 6, 2024)
Mineral Interests and Texas Math. Every charity that receives a substantial number of bequests will eventually receive a gift of one or more mineral interests. Some of these can be quite valuable. Most are not. We have elsewhere identified issues that can arise in connection with bequests of mineral interests. The case of Van Dyke v. Daniels, No. 11-19-00196-CV, 2023 WL 5963083 (Tex. App. Sept. 14, 2023), and the companion cases cited in that decision, raise a new issue that should be on a charity’s radar when mineral interests are in play. The issue is a peculiar idiom of a bygone era for the extent of land interests.
Many mineral interests that appear in bequests were created a long time ago. The one in Van Dyke dates from 1924. In that time, there were unusual measurement conventions in play in Texas that have relevance to this day. Part of the issue in Van Dyke involved a fractional share of a mineral interest described as one-half of a one-eighth interest (1/2 x 1/8). Ordinary math yields an answer of 6.25%, but not so in Texas land language of the 1920’s. “1/8” was a shorthand for “1” (go figure!), so the fractional interest is actually 50 percent. This peculiarity was not only about mineral interests. The prevailing lingo also equated “1000 rabbits” with 1200 of the animals and “a day” with a 10-hour period.
Real Estate: Selling Less Than 100% is Tough. One of the most interesting bequest cases of the past year is Stadel Art Museum v. Mulvihill, 96 Cal. App. 5th 283, 314 Cal. Rptr. 3d 294 (2023). A recent CCK newsletter has featured a detailed analysis of the multiple issues in this case, and we think it is worth the read. In brief, two separate trusts each owned 50% of a valuable portfolio of San Francisco real estate. At the death of the second settlor, the first trust left its share of the realty to Stadel Art Museum, located in Germany. The second trust divided its share among four domestic charities. Both trusts had the same trustee.
For good reasons, Stadel wanted to take title to its share of the portfolio. For equally good reasons, the four U.S. charities wanted their share sold before distribution. The trustee was truly in a bind. Selling fractional interests in real estate, while allowing Stadel to keep 50% would be difficult. It could result in a far longer process and even diminished returns. Nor would replacement of the trustee move the matter along. The problem would remain, with two heads puzzling instead of one. At this writing, there is no further information about the Stadel case. This suggests that settlement talks are in progress or completed.
WHY THIS ISSUE MATTERS
Non-cash gifts can be easy (the 2015 Honda Civic) or complex (collectible art, non-residential real estate). The high-value bequests tend to be complex. There are ways of reducing the considerable risks that can attend these desirable gifts. Where warranted, developing internal expertise is a fine option. For the occasional unusual gift, we strongly recommend consulting with and using external resources to facilitate evaluation and even surrogate acceptance of the gift (with proceeds to the charity, of course). One such resource is Charitable Solutions, LLC and its nonprofit affiliate, the Dechomai Foundation.
FIDUCIARY CONDUCT AND RESPONSIBILITIES
Charities are aware that executors, personal representatives, trustees, and the attorneys that represent the foregoing can sometimes be frustrating. It is sometimes hard to know how far tolerance should go. The cases described very briefly below give a flavor of where the “line” might be in dealing with a frustrating fiduciary.
Mixing Estate Planning and Administration. An attorney manipulated their client’s estate plan in an attempt to insert himself as trustee and divert $12 million to himself, much of it at the expense of charities. Attorney was removed as trustee, pled guilty to criminal conduct, and agreed to make substantial (but not total) restitution. Matter of Est. of Urb., 222 A.D.3d 1088, 200 N.Y.S.3d 807 (2023)
Banker Knows Best. Ellen Stark created a perpetual charitable trust to benefit two food-related charities. At the time of the events relevant to this case, a bank had become the trustee. Ms. Stark’s trust provided that if one of the charities were to lose its status as a 501(c) (3), future distributions would be made to the remaining charity. One of the organizations lost its status and instead of following Ms. Stark’s instructions, the trustee inexplicably spent thousands of trust dollars in legal fees trying to restore the charitable status of the other organization. Predictably, and wisely, the court ordered the bank to reimburse those fees to the estate. Matter of Ellen C. Stark Charitable Tr., 223 A.D.3d 951, 203 N.Y.S.3d 425 (2024).
Nice Try, Nephew. John Garner’s testamentary trust was to benefit a major university and three Catholic charities. His nephew Patrick was successor trustee. The trust document granted him significant powers, which he interpreted broadly, to say the least. He redirected to himself the $3,000,000 earmarked to the charities and tried to conceal the change from both the former beneficiaries and the probate court. (The court noted dryly, ““We also find it relevant that, after he made himself the sole beneficiary of the Decedent’s trust, [Patrick] tried to probate the Decedent’s will through an abbreviated process that would not have alerted the prior trust beneficiaries of the Decedent’s designation.”) At the end of the day, the Beneficiaries prevailed and received their bequests. The court found that the self-enriching “amendment” was antithetical to John’s estate plan and that Patrick had breached his fiduciary responsibilities to the Beneficiaries. The story ended happily, as the generous bequest went to the charities as planned. Garner v. Univ. of Texas at Austin, 317 A.3d 333 (D.C. 2024)
Enough is Enough. The Minnesota Supreme Court removed Lipschultz as trustee of the Bremer Trust because of a cumulation of offenses, none of which by itself would have triggered that sanction. Chief among them was that he “displayed a crude, vulgar and otherwise offensive brashness that has no place in the charitable world.” In general, his conduct (especially toward beneficiaries) was threatening. Overall, his dealings were abrasive, deceptive and self-serving. Even though any financial irregularities in trust administration were minor and easily corrected, the nature and pattern of his of his offenses were sufficient to justify his removal. Matter of Otto Bremer Tr., 2 N.W.3d 308 (Minn. 2024).
Retroactive Fee Increases. An attorney was suspended for retroactively up charging an estate by $100 per hour of work and “adjusting” his fees to match the value of the entirety of the estate’s assets. Disciplinary Couns. v. Estadt, 2023-Ohio-2347, 172 Ohio St. 3d 391, 224 N.E.3d 43, reinstatement granted, 2024-Ohio-273, 173 Ohio St. 3d 1311, 232 N.E.3d 860.
WHY THIS ISSUE MATTERS
Charities are sometimes reluctant to complain to, or even question, an executor or trustee. If the fiduciary has stopped communicating, or if the reporting is vague and confusing, an inquiry is always in order. If unexplained expenses are charged against the estate, a polite (at first) demand for information is essential. There is a legal difference between an executor (whose primary duty is to the estate, not the beneficiaries) and a trustee (whose priorities are the opposite). In our experience, that distinction makes little practical difference as to the propriety of an inquiry by a beneficiary, charitable or otherwise.
PARENTS AND AFFILIATES
Some larger charities have local affiliates. This can raise questions about what organization owns local property if, for example, the affiliate separates from the parent. Obviously, this implicates property acquired through bequests. More recently, greater attention has been focused on behind-the-scenes revenue sharing agreements between parents and affiliates. This pertains to donations of all kinds, and certainly to bequests. Breathe Southern California v. American Lung Association, 305 Cal.Rptr.3d 533 (2023) has been discussed in CCK publications and in fundraising literature in general. On one reading, it stands for the principle that without donor knowledge/consent, undisclosed bequest sharing is disfavored. The bequest must land in the coffers of the entity designated by the testator. There are a handful of additional cases that may illuminate this issue, directly or indirectly. A good example is Derblom v. Archdiocese of Hartford, 346 Conn. 333, 289 A.3d 1187 (2023), a painstaking analysis of the fidelity to testator intent in cases where there is more than one credible claimant for a bequest.
Hands Off Approach to Church Disputes. Beachy v. Mississippi Dist. Council for Assemblies of God, 371 So. 3d 1237 (Miss. 2023) and Holston Presbytery of the Presbyterian Church (U.S.A.), Inc. v. Bethany Presbyterian Church, No. E202201337COAR3CV, 2023 WL 4789082 (Tenn. Ct. App. July 27, 2023), appeal denied (Dec. 20, 2023) both address questions of property ownership upon the disaffiliation of a local organization from the parent. In each case the affiliate had credible arguments for ownership. However, both the Mississippi and Tennessee courts deferred to the parent. Although the courts employed different rationales, there was a heavy dose of the “ecclesiastical abstention” doctrine, a specific application of the rule of separation of church and state. For this reason, we believe that deference to internal policies and revenue sharing agreements is not likely to expand to non-church charities.
WHY THIS ISSUE MATTERS
With the advent of the uniform acts discussed in this newsletter, the possibility of donor/beneficiary litigation over the charity’s use of donations has increased dramatically. While recent cases have addressed noncompliance with restrictions, there is no reason to believe that the focus could not expand to include destination of donations, i.e., undisclosed policies to share bequests and other contributions. It remains to be seen if state officials (i.e., Attorneys General) will find such cases worthy of pursuit. The California AG did not intervene, or make any filing, in Breathe Southern California.