Minnesota Estate Planning: Choosing Charities as Beneficiaries

When drawing up estate plans, most people gather together all documents proving what they own and then make a list of their intended beneficiaries.

This list usually includes loved ones and friends although it may also name one or more charities as beneficiaries. While some of us may just give to charities to offset tax concerns, others do so because they want to leave this world a better place than when they arrived.

Fortunately, there are many ways you can now carefully check out the reputation of each charity youd like to give some money. Keep in mind that by spending just one or two hours of your time looking up these charities online (and maybe making one or two phone calls), you can maximize the chances that the vast majority of your donated funds will directly benefit those in need.

Some Charities Do Not Responsibly Gather and Distribute Donations

Your advance research is crucial since even some highly respected charitable groups often hire professional fundraisers who charge so much that your donations may wind up benefiting the wrong people. Other groups call themselves charities that have no intention of giving most of the money they obtain to worthy causes.

Here are some key indicators that a charitable group may not be running its programs with great caution. This information is followed by both Internet links and other resources that can help you make sure youll be leaving money to a highly responsible and reputable charity.

Common Signs of Dishonest Charitable Groups

• They use high-pressure tactics. As the Minnesota Attorney Generals website notes, reputable charities will never call and demand that you provide immediate credit card information so you can make a sizeable donation. The legitimate ones want you to feel comfortable with your decisions so you might become a long-time donor. If you ever want to give money to such a group apart from leaving them funds under your Will — tell them youll soon go to their website to locate their address. Then, if you choose to give, youll mail in a check. Identity theft has become too great a problem to ever use your credit card when trying to help out any reputable group;
• Its important to realize that some charities, especially new ones, are just shams. There really are people who try to quickly capitalize on every worldwide or regional disaster in an effort to prey upon the kindness of those wanting to help others. Be careful and ask many questions;
• Some disreputable groups may try to hide whether your gifts are tax deductible. If youre simply making a gift apart from naming a charity in your Will, only trust this information if you can find it in print and even then, you should still double check its accuracy;
• Carefully scrutinize charities that employ professional fundraisers. Far too often, some charities will pay such fundraisers large sums of money. You need to be sure these campaigns and other administrative costs arent too high. You can do your research by checking the online resources set forth below;

• Find out if the charity youd like to name in your Will (or provide with current funds) has an office in your state or region. Most highly reputable charities will often have more than just a postal office box address in your state. Do some additional checking on the group if they claim theres only one national or regional office. While such groups may still be reputable, you need to check out if theyre abiding by all state and federal laws;
• Do not let merchandise sent to you that you never ordered — make you feel obligated. Many of us receive mailing return labels with our names on them (or sample holiday gift cards) from various charities. While its fine to give a small gift by check if you want to cover the cost of such items keep in mind that these gifts are usually given in hopes of mildly pressuring you to give money;
• Be hesitant to give an old car to a charity. Such groups may not wind up giving the majority of the funds obtained from the vehicle to the underserved people they claim to be helping. Check out the details of this type of gift very carefully;
• Find out all you can about those running charities that interest you. If a group fails to provide a truthful and impressive statement about the past achievements of those who run a charitys main activities, consider giving to another one. If a charity cannot attract highly reputable leaders, it may be less inclined to use donations responsibly.

Excellent Ways to Check Out a Charitys True Credentials

Since youll probably ask your Minnesota estate planning attorney to create your Will and all supporting documents long before you pass away, always remember to check on each charity youve named as a beneficiary at least every five years. That way, you can be sure its still beingrun responsibly. If the charity has been accused of major improprieties or no longer exits, you can promptly name a new one.

Here are some of the resources you should use to check on a charitys reputation, per the excellent advice provided on the Minnesota Attorney Generals (AGs) website:

• Contact the Minnesota AGs office by phone or online. Ask how you can directly view a specific charitys professional fundraiser registration documents. This information should tell you all about a charitys annual contributions, expenses, and services listed and provided to our state government. Charities are required by law to file copies of their contracts with each of their professional fundraisers. You need to know the percentage of all donations that are paid to these groups and how much money is actually spent on the needy individuals supposedly helped by the publics donations. You can also simply check to see if a charity is properly registered with the state of Minnesota;
• If youd like to donate a car to a charity. Contact the Minnesota AGs office by phone or online and request its publication entitled: Cars for Charity: A Guide to Vehicle Donations;
• Check with the IRS (Internal Revenue Service) to learn if a group is recognized as a tax-exempt organization. According to the MN AGs Office, that current, dedicated IRS phone number is 1-877-829-5500;
• Visit the online Guidestar.org database. This group makes the federal tax returns of charities available to the public online;

• You can contact the Charities Review Council. This group monitors charity activities and provides them with useful guidelines.

Main source for this article: The Minnesota Attorney Generals Office website.

Minnesota Estate Planning Lawyer

Any Minnesota resident interested in learning more about wills and trusts and choosing beneficiaries should speak with a Minnesota estate planning lawyer.Contact Flanders Law Firm and Joseph M. Flanders at612-424-0398.

*By website contributor and freelance writer, Elizabeth Smith, J.D., M.A.