Posted June 1st, 1998

In The News…

Man’s best–make that ‘bequest’–friend

According to a recent survey by the American Animal Hospital Association, 18 percent of Americans are making provisions for their pets in their wills. This gives a whole new meaning to the old saying “going to the dogs.”

Source: The Commercial Appeal, Memphis, TN, March 27, 1998

Giving to pay the U.S. debt

You know your donors are probably giving to other nonprofit organizations. But did you know you may be competing with the United States Government for their gifts?

Some Americans are donating money to the U.S. Treasury to help pay off the national debt. Since 1961, the Treasury has received $56.8 million in gifts from citizens trying to get the nation out of its $5.5 trillion debt.

Many of the contributors express patriotic reasons for their gifts. A Lithuanian immigrant sent a 5-figure check in appreciation for the freedom and democracy he had enjoyed while living in the U.S. Another woman who left $153,000 for the debt when she died wanted to “show [her] appreciation and love in helping [her] country in this small way.”

Source: The Commercial Appeal, Memphis, TN, March 9, 1998

IRS approves amendment of unitrust

When the donor in Private Letter Ruling 9804036 established a charitable remainder unitrust, the donor intended to receive payments that were either equal to eight percent of the annual valuation of the trust or the trust’s annual income, whichever was less. However, the counsel who drew up the trust instrument did not add the specific clauses necessary to accomplish this modification of the trust’s payments.

When the donor realized the error, the donor sued the attorney for malpractice and petitioned the state court to amend the trust. The state agreed to reform the trust upon approval from the IRS.

The IRS ruled in favor of reforming the trust for the following reasons: the trust had been administered properly using the fixed percentage payment method, the donor sought to correct the mistake promptly, the problem was an admitted drafting error, and there was no evidence that the taxpayer or any other income beneficiary was attempting to make the amendment in order to reduce his taxes.

Source: Probate Practice Reporter, March 1998

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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