Introduction

Planned gifts can be complex, especially when a donor passes away. FreeWill is here to support you and your organization with each step of the planned giving journey. What do you do when a donor passes away? For many nonprofit organizations, the administration of a planned gift is a new process as it involves sensitive communications with families and attorneys. It is critical to understand the basics of estate administration to ensure that your organization receives the full benefit of the bequest, that your donor’s intentions are carried out, and that you continue to steward the relationship with the deceased’s family members.

Here is a step-by-step guide to help you in this process: how to identify deceased donors, how to steward planned gifts, and how to realize bequests and beneficiary designations. This guide provides next steps once your organization has received a deceased donor notification within the FreeWill portal.

 

If the donor is anonymous, no action is needed from your organization at this time. FreeWill provides the donor’s location and birth/death year for anonymous donors. If you receive correspondence from the estate executor, you will likely be able to match the donor’s details to your gift in Portal.

 

Verify your donor’s information

  • Upon receiving your deceased donor notification in Portal, it’s recommended to verify the donor information. We recommend conducting a Google search to locate the donor’s obituary. The following search term can be effective: Donor’s first name, last name, city, state and “obituary.” Your FreeWill Portal deceased donor identification makes it super easy by providing a link that auto-populates this search. You may also choose to consult local newspapers or search legacy.com. 

Share your condolences

  • Send a sympathy card: You may consider sending a letter to the donor's family or estate representative. A handwritten note expressing gratitude for the donor's support and condolences for the family's loss is a personal touch that can be greatly appreciated. If your organization does not have mailing information for the donor’s family, consider sending this note to the donor’s home, addressed ‘to the family of [donor’s name].’ An estate executor (known in some states as the personal representative) can ensure your note is passed on to the family.
  • Sample sympathy note:

Dear [Family Member or Representative],

 

We were deeply saddened to learn of the passing of [Name]. [Name] was a valued member of our community and made a significant impact through [his/her/their] generous support of our organization. We are grateful for the opportunity to have known and worked with [Name] over the past several years.

 

Please accept our sincere condolences during this difficult time. We understand that this loss is immeasurable and our thoughts are with you and your family.

 

We recognize the extraordinary generosity and impact that [Name] has had on our organization, and we are committed to honoring [his/her/their] thoughtful legacy. 

 

If there is anything we can do to support you and your family during this time, please do not hesitate to reach out. We are here to help in any way we can and extend our deepest sympathies to you and your family.

 

Sincerely,

[Your Name]

[Your Title, Contact Info, Nonprofit Name]

 

  • Honor tribute or memorial gifts: If your organization receives a charitable gift in memory of the donor, it's important to let the family know that a gift was made in honor of their loved one. You may choose to share the name and contact information of the donor(s) with the family, without sharing the donation amount. You may also share the total of dollars donated if several individuals donated in memory of the individual.

  • Respect the family's wishes: If the family requests privacy or does not want any gifts or acknowledgments, it's important to honor their wishes. By being respectful and supportive of the family during this difficult time, you can strengthen your relationship with the family and continue to carry on the donor's legacy.

  • Follow up with the family: Following up with the family in the weeks and months following the donor's passing can be a meaningful way to show support and offer condolences. A phone call or email expressing sympathy and checking in on the family can be greatly appreciated.

Contact the estate executor

  • It is the executor or attorney’s responsibility to get in touch with all beneficiaries to notify them about the start of the probate process, which can generally take about 1-4 months to complete. As a beneficiary, you are entitled to a copy of the will or trust that contains the bequest to ensure you have a clear understanding of the donor's wishes. 
  • If you have not been contacted by the estate representative, you may be able to search for the will via the probate court. Nonprofits can request a copy of the will from the probate court, although there may be some fees involved. It is important to note that the availability of public records varies depending on the state or county.
  • Once you have received this information, work with the estate's executor or attorney to determine the best way to receive the bequest. This may involve working with the executor to transfer specific assets or waiting until the estate's assets have been liquidated and funds are distributed.

  • It is important to note that estate administration is a lengthy process, often requiring 12 months or more to receive a planned gift. Executors are responsible for settling the donor’s estate, which may involve identifying and valuing assets, paying any outstanding debts, and distributing assets according to the donor’s wishes. The length of the process, from several months to years, may depend on the complexity of the estate and the state law and requirements.

  • It is recommended to stay in regular contact with the estate's executor or attorney, staying in contact every 6-8 weeks for updates. You should also be prepared to provide documentation or other information as needed to help facilitate the bequest. By staying in regular contact with the estate's executor or attorney and being prepared to work through any challenges that arise, you can honor the donor's wishes and ensure their planned gift makes the desired impact on your organization’s mission.

  • In some cases, nonprofits may encounter challenges in receiving a bequest. For example, the donor's will or trust may be challenged or “contested” by family members or other beneficiaries. In these situations, your organization may need to work with your own legal counsel to ensure that the donor's wishes are honored.

  • Consult your organization’s gift acceptance policy to guide your decision to accept a gift. Your organization has the right to decide to reject or accept a bequeathed asset.

Beneficiary gifts: Contact the financial institution

  • When a donor passes away and names your organization as a beneficiary of a retirement account, payable-on-death bank account, or other non-probate assets, it's important for the nonprofit to stay in contact with the financial institution to ensure that you receive the full benefit of the gift. In most cases, the financial institution will contact your organization regarding your beneficiary designation.

  • The first step is to gather all of the necessary information about the donor and the account. This includes the donor's full name, date of birth, social security number, and the name and contact information of the financial institution. This information can be provided by the estate executor or attorney.

  • Be prepared to provide documentation and complete necessary forms and applications. These forms often require sensitive information to be collected from organization staff or board members.

  • With all communication, it is recommended that you provide your organization’s full legal name, address, tax-exempt status, Employer Identification Number (or EIN), and contact information for an authorized representative. It may be helpful to include a signed letter from your board president to indicate the document signer is authorized to facilitate financial transactions on behalf of the organization.

  • Depending on the financial institution and the type of account, there are different requirements for claiming the gift. For retirement accounts, such as individual retirement accounts (IRAs) or 401(k) plans, you will likely need to provide a completed beneficiary claim form, a copy of the donor's death certificate, and proof of your organization’s tax-exempt status. It is important to document all correspondence with the financial institution.
  • Nonprofits should work with their own financial advisors and legal counsel to ensure compliance with all applicable laws and regulations.

Next Steps

When a legacy donor passes away, your organization will begin the administration of a planned gift. It is important to keep in contact with the executor of the donor's estate to ensure that the donor’s wishes are honored. We recommend providing any assistance or information the estate executor or financial institution may need. By maintaining respectful and thoughtful communication, your organization can honor the legacy of your donor and ensure that their gift creates a meaningful impact.

 

 

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