Charitable Gift To Unintended Beneficiary

Estate planning contemplates the future based on the present. A current suit involving Rider University, the Westminster Choir College, NJ Attorney General Gurbir Grewal, Kaiwen Education and various plaintiffs demonstrates why estate planning must contemplate the currently unforeseeable. In 1935, Sophia Strong Taylor gifted 23 acres to Rider University. Westminster Choir College was founded in 1920 in Dayton, Ohio. It moved to Ithaca, New York in 1929 and to Princeton, NJ in 1935. In 1992, Westminster Choir College merged with Rider University. In 2017, Rider announced the severance of Westminster in a sale to Kaiwen Education, a subsidiary of the Chinese government for $40,000,000 with the limitation that Kaiwen must continue to operate Westminster Choir College at the Princeton location for at least 10 years. The suit has been brought by alumni, faculty and other supporters of Westminster. Their claim is that Sophia Strong Taylor donated the land with a specified intent that it support a college with a religious mission and that the Chinese government, which controls Kaiwen, imposes restrictions on religious practice. The suit seeks declaratory judgment that Taylor’s grant of the property to Westminster was conditioned upon Westminster’s continued operation as a training school for music ministers. Additionally, ownership of the Princeton campus was to transfer to the Princeton Theological Seminary in the event that Rider, or its successor, ceased using the property for the intended purpose. Howard McMorris, the last surviving board member of Westminster from the time of the Rider merger and a Plaintiff in the suit, claims that the Westminster board of trustees did not reasonably foresee Rider’s for profit sale to what the plaintiff’s call a sham charitable entity created by a for-profit entity with joint board membership between the non-profit and for-profit. Sophia Strong Taylor is no longer here to clarify her intent and the only way the court will be able to discern same is through the documents she had prepared and signed during her lifetime. Trusts and Wills may be interpreted by the court but not revised, rewritten or filled in with terms not present in the document. It is imperative that you think through the possibilities with any Trust. However, when giving to charity through a trust, at all times, include a reversionary clause in charitable giving that redirects your gift to another charity in the event that the charity of your initial choosing merges with another entity or otherwise changes their mission or purpose in a manner that is no longer congruent with your reason for benefitting them. With many, Irrevocable Trusts are created long before death but, as they are irrevocable, they may not be only be reformed as called for within the document itself at the time of drafting. Although charitable remainder trusts are excellent ways to save on taxes, the underlying charity if most often chosen for its specific benevolent purpose. For additional information regarding estate planning and trusts, please visit DarlingFirm.com or call 973-584-6200 to schedule a consultation and insure your estate planning needs are met. This blog is for informational purposes only and not intended to replace the advice of counsel.