Wills, Trusts, and Estates – Part 1

Church Law and Tax 1989-03-01 Recent Developments Wills, Trusts, and Estates Richard R. Hammar, J.D.,

Church Law and Tax 1989-03-01 Recent Developments

Wills, Trusts, and Estates

Several states have adopted “mortmain statutes” that permit heirs to invalidate gifts made to churches and other charities in the will of a donor who dies within a prescribed period of time following the execution of his or her will. To illustrate, a Florida statute makes it possible for a spouse or “lineal descendant” (i.e., a child or grandchild) to avoid charitable gifts made in the will of a decedent less than six months before the decedent’s death. Such gifts cannot be challenged if the decedent’s previous wills (executed more than six months prior to death) left substantially similar gifts to charity. In a recent case, a Florida court was asked to determine whether this law permitted the daughters of a decedent to challenge a gift made by their deceased father 26 days before is death. Here are the facts. The decedent executed a “revocable trust” and a will in 1979. The will distributed the decedent’s personal effects to his wife, and then “poured over” the residue of the estate into the trust, which was specifically referred to in the will. The trust benefited the decedent’s adult daughters. In 1986, just 26 days before his death, the decedent amended his trust to substitute several religious organizations as the ultimate beneficiaries of his trust (rather than his daughters). Following their father’s death, the daughters attempted to invalidate the charitable gifts on the basis of the mortmain law. The charities argued that the mortmain law only permits heirs to challenge gifts made in wills within six months of a donor’s death, and not gifts made in trusts (even if the trust is specifically referred in a will). The daughters maintained that logic requires that a trust referred to in a will, and into which the will “pours over” or distributes assets, must be subject to the mortmain law. The state appeals court agreed with the charities, and upheld the validity of the gifts. It reasoned that the mortmain law, by its own terms, only permitted heirs to challenge charitable gifts made in wills, and therefore it could not apply to charitable gifts made in a trust even though the will distributed a portion of the decedent’s estate into the trust. Churches can assist potential donors avoid the impact of mortmain laws by encouraging members to prepare their estate plans while they are in good health. A future issue of Church Law & Tax Report will summarize the mortmain laws in all 50 states. In re Estate of Katz, 528 So.2d 422 (Fl. App. 1988).

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