Leaving assets to a charity is often a part of my client’s estate plan. Some of my clients have named charities as a beneficiary on their retirement plans. I’ve even had clients who have taken out life insurance policies that benefit their local church in the event of their death. Each person’s plan is different. Last week, I had a meeting with a client who had a different type of request. They wanted to leave their house to a charity, which at the same time makes it a non-probate asset. The charity could then use the property to expand its mission and house some needy people who could use a place to live.
Naming a Charity as a Beneficiary of Real Estate
In Minnesota, a simple way to accomplish this is to name the charity in a Transfer on Death Deed. Using this method, the charity does not have any right to the property while the owner is alive. You can also change your mind and change the deed at any time. This “revocable” nature of the deed is often an attractive feature of this type of planning.
But upon your death, the charity can claim the property without needing to go through the probate court. The charity will need a copy of the death certificate and will need to file an affidavit (called an Affidavit of Identity and Survivorship). One wrinkle to this planning method is if you were sick near the end of your life. As part of the process, they will also need to get a medical assistance clearance to show there are no liens on the property.
If you choose to plan this way, there are a few tips to follow. One of the most important is to let the charity know that they have been designated under the Transfer on Death Deed. That way, they know to arrange for the transfer of the property when the time comes. It is also helpful to let the charity know who the personal representative is under your estate plan so that they know who to contact. Since they will need a copy of the death certificate, the personal representative is the best person to deal with to get that quickly.
Next Steps
If you are considering leaving real estate to a charity as part of your estate plan, or if you already have a will that you may need to update, call my office to set up a legal strategy session and we can review the best options for you – (877) AMAYERS.
