One issue that occurs in estate planning is whether or not a charitable pledge can be enforced on a person’s estate after death. Wealthy individuals often make pledges to their favorite charitable organizations during their lifetime, only to die before fulfilling the pledge. Executors are then placed in the difficult situation of balancing its duty to ensure the estates assets for the decedents heirs and to pay the money owed by the estate to the charitable organization. If a court rules the pledge is enforceable, the pledge must be paid out of the estate before the rest of the estate’s assets are distributed to the beneficiaries.
Courts will often find a charitable pledge enforceable when these situations occur:
The pledge is an offer to contract that becomes binding when work obligated by the pledge has begun, or the charity relying on the pledge has otherwise incurred liability.
Donor’s pledge has induced other pledges
The charity’s acceptance of the pledge imparts a promise to apply the funds according to the donor’s wishes, and his pledge is supported by that promise.