Introduction

What should you do when a donor passes away? For many nonprofit organizations, the administration of a planned gift is a new process that 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 decedent’s family members.

FreeWill is here to support you and your organization with each step of the planned giving journey. This guide provides next steps once your organization has received a deceased donor notification, within your Partner Portal or directly from an executor or probate court, so you can identify deceased donors, help locate any estate planning documents, steward planned gifts, and realize bequests and beneficiary designation commitments. 

Step 1: Verify your donor’s information and giving history, if any

  • Upon receiving your deceased donor notification in Portal or through a "Notice of Probate", 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.” Deceased donor identification in FreeWill's Partner Portal makes it easy by providing a link that auto-populates this search. You may also choose to consult local newspapers or search legacy.com. 

  • You should also verify any previous relationship between the donor and your organization by searching your donor database for volunteer or giving history, notification of a bequest commitment, or legacy society inclusion. Use this opportunity to add the obituary and update the donor's mailing information.

Step 2: Share your condolences

  • Send a sympathy card: If your organization has a previous relationship (through volunteerism or donation history) with the decedent, 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 donate in the person's memory.

  • 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.

Step 3: Administering the estate

The family of the decedent is responsible for administering the decedent's estate and it may not always happen immediately upon their passing. If a signed will or revocable living trust exists, it is important for the family to locate it so they estate may be administered and the individual's wishes carried out. If no documents are found, the probate will be conducted under the state's laws of intestacy, which dictate how the assets are to be distributed.
  • Remember who is responsible: Please note the onus of responsibility lies on the family or friends of the decedent to uncover these documents, not your organization. You can offer guidance or general recommendations on where to look, but to avoid a conflict of interest, you should not search yourself.

  • Remember FreeWill's privacy policy: Though FreeWill may have digitized copies of wills or other information, we do not keep signed copies of any testamentary documents. Furthermore, because FreeWill's agreement is solely with the person who uses our platform to create his/her/their own will or revocable living trust, we cannot share this information with anyone else absent legal authorization, such as a court order.

    • Among the decedent's personal papers. People often keep important papers such as insurance policies, deeds, and wills in one place, typically a fire-proof box or filing cabinet. Look in those places as well as other "safe" places where documents might be kept, like desk drawers and closets.
    • The decedent's attorney. Even if the attorney was not engaged by the decedent for estate planning, sometimes important papers are given to trusted legal advisors to hold
    • Safe deposit boxes. Depending on the laws of the state you are in, a spouse or co-owner may be able to access the decedent's safe deposit boxes. Contact the banks where the decedent had depository or lending relationships. In some states, a court order may be needed to gain access.
    • The probate office. In most states, the probate office will store a will for a nominal fee. These offices, however, are generally not responsible for determining if a testator who has deposited a will with them has died, so they will not take any action unless and until someone asks for the will.The family starts the search: When a donor dies and the family is not immediately aware of whether or not they have left a will or revocable living trust, the family should conduct a search to ascertain if these documents exist. Common places for them to look include:

The family should ensure the documents are signed. If the decedent left an unsigned will, or a will that is signed by the decedent but not properly witnessed, it will not likely be of any use for the legal disposition of their assets. While family members have ideas about what mattered to the decedent and can provide guidance on gifts in memoriam, FreeWill is unable to provide any draft documents to assist in probate. A probate office or court will not enter a will into probate unless it is properly executed with original signatures. In most cases, a photocopy cannot be used.

Step 4: Work with the estate executor through probate/administration

  • Once any estate documents are located, 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. This notification can generally take about 1-4 months to receive, from the time probate or estate administration is opened. 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. You can request this from the executor if you have received notification of probate.
  • If you have not been contacted by the estate's executor or attorney, and you believe you were named by the decedent, you may be able to search for the will via the probate court. Anyone can request a copy of the will from the probate court, although there may be fees involved. It is important to note that the availability of public records varies depending on the state or county. For example, in some locations, the will may be available online.
  • The first time you learn the details of a gift may be during the estate administration process. There are times when the donor's bequest or intentions may not align with your organization's policies. Consult your organization's gift acceptance policy to guide your decision to accept any gift. Your nonprofit has the right to reject or accept any bequeathed asset.

  • When you have confirmed a charitable bequest in the final signed will, 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. This can be as simple as a phone call to request an update, or to offer additional information if necessary. You should also be prepared to receive and 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.
    • Be sure to update your Partner Portal (see Step 5) when you have additional information regarding gift realization (actual gift value, expected gift date).

  • In some cases, nonprofits may encounter challenges in receiving a bequest. For example, in rare cases 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.

Step 5: Update your Partner Portal

  • Your FreeWill Partner Portal has been designed to make planned gift tracking easy and intuitive. On the donor's Legacy Gift Details page, you will find several key pieces of information to help you better report on all of your planned gifts:
    • Status provided by FreeWill
      • Identified - Donor has finished creating their estate plan on FreeWill and indicated a bequest intention to an organization
    • Status updates to be made by your organization each time a step has been completed
      • Requested Confirmation - Organizational outreach to donor has been initiated
      • Confirmed - Donor has confirmed the gift intention
      • Realization Notification - Organization has received word that a will has entered probate or RLT/beneficiary gift is being administered
      • Received - Funds have been received
    • Gift value data provided by FreeWill
      • FreeWill Estimated Value - This field is not editable and displays the estimated value when the gift was identified (actual values may differ)
    • Gift value data to be updated by your organization as you learn more about the donor (while alive) or estate representative
      • Projected Amount - This field is intended for you to provide a more accurate estimate of what you expect to receive, based on information you learn from the donor or other sources
      • Received Amount - This field reflects the actual amount received by your organization after the estate has been administered.

For more information, search "Adding projected and realized legacy gift values in Portal" in the Partner Portal Help Center. Or watch this short explainer video.

Step 6: Receive the gift and honor the donor's legacy

Once estate administration is complete, your organization should have received one or more distributions (via check, direct transfer payment, or any other agreed upon method). When the gift has been received, it's time to ensure it's put to proper use for your mission.

  • Distribute the full value of the gift as intended: If the donor specific a program, initiative, or other fund they wished their bequest to support, ensure you honor those wishes meticulously and accordingly! This information should be passed along during probate, and you can always reference the donor's Gift Details and/or gift message in your Partner Portal.
  • Recognize their generosity: If the donor consented to have their name shared alongside their gift, recognize their generosity. If applicable, add the donor to your organization's legacy society, an annual report, or consider another form of public acknowledgment.

  • Share updates: If the family consents, keep them up-to-date with reports on how their donation is being used. This is a further opportunity to steward their family members as potential donors.

What is the process for a beneficiary gift (non-probate)?

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 work closely 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. You can start by requesting this information from the executor or the estate administrator.

  • You will likely need to provide a death certificate. One may be provided by the estate executor or attorney, or beneficiaries can request a copy from the county vital records office (usually for a small fee).

  • 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.
  • Be prepared to provide documentation and complete necessary forms and applications. These forms often require sensitive information to be collected from organizational officers or board members, including a social security number.

  • With all communication, it is recommended that you provide your nonprofit's full legal name, address, tax-exempt status, Employer Identification Number (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.

  • Nonprofits should work with their own financial advisors and legal counsel to ensure compliance with all applicable laws and regulations.

Final thoughts

 

When a legacy donor passes away, your organization will begin the administration of a planned gift. It's 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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