Gifts to churches by elderly members are common. By some estimates, up to $40 trillion will be passed from the current generation to the next, creating an unprecedented opportunity for charitable giving. In some cases, though, the validity of such gifts is challenged by family members on the grounds of mental capacity or undue influence. With the increasing number of elderly individuals making substantial gifts to their church or favorite charity, these challenges are likely to be raised more frequently.
The resolution of such challenges depends on a careful examination of all the facts and circumstances. A recent decision by the Vermont Supreme Court—Curran v. Building Fund of United Church, 2013 WL 6332676 (Vt. 2013)—provides helpful guidance that will assist church leaders in responding to claims of diminished mental capacity and undue influence. By following the recommendations in this article, church leaders will reduce the risk of gifts being invalidated for undue influence.
Gifts Freely Given—or Coerced?
For more than 60 years, an elderly woman (the "testator") lived with her husband in a small community where both were active in a variety of community organizations and activities. In 1993, after her husband's death, the testator placed her assets into a trust. The beneficiaries of the trust were the testator's brother, sisters, and a niece and nephew. In 2004 the testator amended the trust to delete her brother as a beneficiary, reduce the distributions to some other relatives, and add three local community organizations including her church's building fund as beneficiaries.