Situations have arisen in the past where money was left to the Archdiocese of Toronto for the education of priests. That will involve money going to St. Augustine’s Seminary, but the archdiocese still has to make sure the money goes for the purpose it was intended. Register file photo

Good pre-planning avoids estate pitfalls

  • October 31, 2018

It happens often that a deceased person leaves a sum of money to support a broad cause without naming a specific charity.

That type of estate planning can work, but it has to be handled carefully. It all comes down to the pre-planning.

Joseph Karl Witt, a widower with no children or other relatives, left a sizeable estate when he died in 2011 at the age of 86. He was a deeply faithful man, loyal to his Toronto parish and Church, and wished to see his assets spread among charities close to his heart. 

While he named no specific charity to be a beneficiary of his estate, he instructed that his trustee distribute the funds through Catholic Charities of the Archdiocese of Toronto, or to any of the ShareLife agencies, or any other charity in Ontario “whose purpose is to assist people in need.” He left selection of the agencies up to the discretion of his trustees.

It was a “very unique” situation, said Arthur Peters, executive director of ShareLife. “You don’t see that too often. It was a very generous gesture,” he said.

And it was an example of getting things right, a situation in which the trustee and the deceased were on the same page. 

Witt’s trustees were meticulous in investigating which agencies would be a good fit for his money because they had done their due diligence and were very aware of the type of agency that would fit his wishes. So Peters’ office set up a presentation for the trustees and agencies were identified that most closely aligned with Witt’s wishes. In the end, the majority of the gifts ended up going to ShareLife, the charitable fund-raising arm of the archdiocese, which would benefit a wide sector of society.

“Over the years (the trustee) felt that ShareLife was one organization that fulfilled the wishes of Mr. Witt’s estate and he made contributions for about four or five years,” said Peters.

In contrast to that case, the Archdiocese of Toronto is dealing with a Will that designated a considerable amount of money to the archdiocese which the archdiocese had to turn down. From its interpretation of the deceased’s wishes, the money was not the archdiocese’s money to take care of (The Register is not using any names as the matter has yet to be fully dealt with).

“As an archdiocese, we had to turn down the gift,” said Nerissa Flores, Manager of Planned Giving and Personal Gifts with the Archdiocese of Toronto.

In the end, the trustees of the estate were directed to the right agency and the wishes of the deceased are expected to be met.

It’s something Flores encounters quite often. There is often a general instruction in the Will — say, to have money from the estate used in the education of a priest — but few specifics of where the money should go. In Toronto, that would mean sending the money to St. Augustine’s Seminary, but that comes with its own set of complications, said Flores. The seminary will now have to be instructed that this money “cannot be put into the building or a maintenance fund, something like that,” said Flores. It has to be used for the specific purpose to meet the deceased’s wishes.

Complications can arise in such circumstances, and Flores says they have “to make sure we can present options that will clearly fall under what the person wished.”

That means working closely with the deceased’s representatives to make sure that the gift ends up doing as it was meant.

“We always consult with the trustee, and sometimes the estate lawyer, just to interpret the wishes of the deceased because we want to be as faithful as possible to what the deceased wants,” said Flores.

“If it’s something that is very vague we always consult with a lawyer just to be sure that we don’t get something that wasn’t originally meant for us.”

Eric Bundgard, partner at Evenson Bundgard LLP in Toronto, said he prefers specific instructions in a client’s Will and warns that leaving broad instructions can be fraught with problems that can cause issues down the road, in particular for an executor.

“You don’t want to give too much discretion to the executor because they may not want to exercise it,” he said. “It puts them in an awkward spot.” 

Still, the trustee does have to act in accordance with the Will’s instructions. The key is to minimize the trustee’s exposure, said Bundgard, while also making sure the deceased’s wishes are met. 

Flores said the best way to make sure this happens is through proper pre-planning and good communication between all involved.

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