As a nonprofit, donor support is critical to the success of your organization. When a gift made to your cause through a will or trust is contested, it can disrupt not only your operations but also the very heart of your mission. We understand that facing such challenges can feel overwhelming, but it’s important to remain focused and take the right steps to protect the legacy your donors intended to leave behind before they passed away if a beneficiary is contesting gifts to a charity or non-profit.
“When a charitable gift is contested, it can feel like the very foundation of your organization is being challenged,” said Abbas Gokal, a Partner at Gokal Law Group who specializes in trust litigation and probate matters and currently serves as a member of the Board of the Orange County Child Abuse Prevention Center (CAPC). “But with legal guidance, you can protect the legacy your donors intended and keep your mission moving forward.”
Here’s how you can honor the legacy of a loyal advocate by preserving the gift that they left you if a beneficiary is challenging your distribution.
What to Do When a Beneficiary is Contesting Gifts to a Charity
If a beneficiary is contesting gifts to a charity made by a trust, the best course of action is to consult a non-profit trust litigation attorney in order to understand the legal grounds for defending your gift, assess the strength of your case, and discuss potential strategies to resolve the dispute, which could include negotiation, mediation, or litigation depending on the situation. Here is our guide for charities and non-profits.
Why Might a Gift Be Contested?
There are several reasons beneficiaries might challenge a charitable gift made to a nonprofit. Here are some common reasons that a beneficiary may dispute a gift made to a charity:
- Feeling Disinherited: Some beneficiaries might feel entitled to a larger share of the estate and perceive this donation as encroaching on their inheritance. This is a common cause for challenging the gift.
- Suspicions of Undue Influence: Claims of improper influence over the deceased can arise, especially when there’s a significant donation involved.
- Concerns About Capacity: Beneficiaries may argue that the deceased lacked the mental capacity to make sound decisions when gifting to your organization.
- Unclear Terms: If the terms surrounding the gift are ambiguous, the gift is left for a purpose that no longer aligns with the charity’s mission, or the gift is left to a charity that is not recognized in the estate planning document, this can cause a contest.
- Family Disputes: When other beneficiaries are feuding over their shares, your organization could get dragged into the middle. Even if your organization isn’t the target of litigation, you will have to wait until they resolve their dispute. In these situations, the court will order all beneficiaries to participate in mediation, including your nonprofit. If you don’t participate, other beneficiaries can reach a settlement that excludes your nonprofit, diminishes your share, or eliminates it altogether.
How Can You Safeguard Your Gift?
It’s crucial to be proactive in safeguarding the integrity of the gift your organization was meant to receive. This is especially true for nonprofits and charities because these gifts enable you to do the work you have dedicated your life to doing.
Here are some key steps you should take if a beneficiary is contesting gifts to a charity:
- Gather Documentation: Start by collecting all relevant documents, including the will or trust, communication with the donor, and records of past donations. Solid documentation can be your strongest defense to prove that the person who left the gift intended to do so.
- Demonstrate the Donor’s Intent: It can be helpful to show the long-standing relationship between the donor and your organization. Highlight any past involvement, as well as expressions from the donor indicating their desire to support your cause. For example, if they made donations, volunteered for your organization, or advocated for you, this could help solidify that intent.
- Seek Legal Counsel: Working with an experienced nonprofit trust litigation attorney is crucial in these situations. They can guide you through your options, make sure you fully understand your rights and defend your rightful donation.
- Maintain Transparency: While it’s important to cooperate with the beneficiaries and the executor of the estate, it’s equally important to be transparent about your commitment to respecting the donor’s wishes. In doing so, you could possibly open the door to alternative dispute resolutions that enable you to avoid costly and time-consuming litigation that can detract from your organization’s time and resources and delay when you receive this donation.
How Can Gokal Help When a Beneficiary is Contesting Gifts to a Charity?
At Gokal Law Group, we are dedicated to helping nonprofits like yours navigate these complex and often emotionally charged situations. To defend your gift, you need to take action as soon as you’re notified that you’re a beneficiary. Here’s how we can assist:
- Assess the Validity of the Challenge: Our skilled attorneys will determine whether the beneficiary has legitimate grounds to contest the gift, ensuring that your organization is not unfairly impacted.
- Negotiate a Resolution: We can help negotiate settlements or compromises that protect your nonprofit’s interests, allowing you to continue your mission without unnecessary disruption.
- Mediation: We can provide expertise and leverage during private mediation, where a neutral mediator can help both parties reach a mutually agreeable solution.
- Litigate the Matter: If needed, we’re ready to defend your organization’s position in court. Our attorneys will represent your cause with the expertise and determination necessary to secure the donor’s intent.
“Volunteering, charitable acts, and giving back to the community are core values at our firm, and we understand that every donation represents a promise to your cause, and protecting that promise is vital,” said Abbas. “We’re here to ensure that your organization’s future remains secure, no matter the challenges you face.”
Related Article: Understanding the California Trust Litigation Process
Protect the Endowment You’re Entitled to if a Beneficiary is Contesting Gifts to a Charity!
For your organization, every gift represents a commitment to your cause and a belief in your organization’s mission, so a contest can have huge ramifications on your organization and undermine the legacy of the donor. Our compassionate, results-oriented attorneys are here to help you safeguard that legacy. We’ll walk you through the process, providing legal advice and the support you need to focus on your work.
If your nonprofit is facing a challenge to a charitable gift, contact us. We’re here to protect your organization’s future so you can keep changing lives.
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