A Will May Express Generosity. A Funded Living Trust Is More Likely to Deliver It.

By Andy Ragone, CGPP

Every charitable organization wants donors to think about the future. Many encourage supporters to create a will, use a free online will service, or include a charitable bequest in their estate plans.

These are valuable first steps. Yet a first step should lead somewhere.

For a charitable organization, the real measure of estate planning outreach is the number of charitable intentions that eventually become materialized gifts. A donor may sincerely intend to leave a bequest, sign a will, and even inform the organization of that decision. Decades later, the will may be missing, outdated, replaced, contested, or irrelevant to the way the donor’s assets are actually transferred.

A carefully prepared and properly funded living trust creates a stronger connection between the donor’s intentions and the assets that can fulfill them. This leads to an important conclusion:

A charitable organization that encourages estate gifts but does little to help donors complete and fund their living trusts may be missing some of its greatest bequest potential.

The opportunity is larger than marketing a bequest. It is helping donors build plans that can work.

A Will Records an Intention

A will is an important estate planning document. It can name beneficiaries, nominate guardians for minor children, designate an executor, and explain how probate assets should be distributed.

Its limitation is found in the word “probate.”

A will generally relies upon the probate court to validate the document, appoint a personal representative, settle claims, and authorize the dist

ribution of assets. It takes effect after death and governs only the property subject to its terms.

A living trust can begin working during the donor’s lifetime. Once appropriate assets are transferred into the trust, the trust becomes the structure through which those assets are managed and eventually distributed.

For charitable organizations, the difference is consequential. A charitable provision written in a will remains an instruction waiting for a future court process. A charitable provision within a properly funded living trust is connected to assets already held within the donor’s chosen distribution structure.

Los Angeles County Shows What Is at Stake

Los Angeles County is home to nearly 10 million people, all served by a court system whose Probate Division must handle decedents’ estates, trusts, conservatorships, guardianships, and related matters. A formal California probate typically takes 9 to 18 months, while complicated or contested estates may take much longer. During that period, families can face public filings, creditor claims, property management responsibilities, hearings, professional fees, and delayed distributions. If someone contests the will, challenges the executor, or alleges incapacity or undue influence, a family’s grief can become prolonged litigation.

Probate also carries significant financial costs. California law allows ordinary attorney compensation based upon the gross value of the probate estate. The schedule begins at 4% of the first $100,000, followed by 3% of the next $100,000 and 2% of the next $800,000. The personal representative may receive compensation under a parallel schedule. For a $1 million probate estate, ordinary statutory attorney compensation can reach $23,000. The personal representative may also be entitled to $23,000. That creates the potential for $46,000 in combined ordinary compensation before filing fees, appraisal expenses, accounting costs, property expenses, and extraordinary legal fees.

The cost of creating a well-designed living trust with an experienced estate planning attorney may be substantially less than the eventual cost of probate. More important, the planning takes place while the donor is available to make decisions, clarify intentions, and resolve potential problems.

Estate Planning at 40 Is Different from Estate Planning at 70

At 40, a parent may create a will because she has young children. She wants to nominate guardians and provide basic financial protection if something happens to her and her spouse.

Her estate may still be taking shape. She has a mortgage, developing retirement accounts, modest investments, and potentially another 40 or 50 years of life ahead of her. The plan is primarily about protecting children during a vulnerable season.

At 70, the questions change.

Her children are adults. Grandchildren may have arrived. The family may have experienced marriages, divorces, deaths, disabilities, estrangement, reconciliation, and shifting financial circumstances. Her home may have appreciated significantly. Retirement accounts, investments, insurance, business interests, and other property may now form a substantial nest egg.

She is no longer planning primarily for guardianship. She is deciding what a lifetime of accumulated wealth should accomplish.

Who should manage the estate? Which assets should go to which beneficiaries? Should every beneficiary receive an immediate distribution? Does one child need greater protection? How should a blended family be treated? What charitable causes should participate in the estate?

This is where charitable bequest potential becomes especially meaningful. The 70-year-old donor possesses both a clearer sense of mortality and a more substantial pool of assets from which to create a gift. She may be ready to revisit a will written decades earlier and develop a plan that reflects the family and financial life she has today.

A charitable organization should be present at this moment, though too often those moments pass unnoticed.

A Living Trust Can Carry Out a More Precise Plan

A living trust carefully crafted by an estate planning attorney can address complex family circumstances with far greater precision than a simple will-based plan.

The trust can identify how particular assets should be managed, who should oversee them, when beneficiaries should receive them, and what protections should remain in place.

A trust may:

• Hold an inheritance for a financially inexperienced beneficiary

• Protect a loved one with disabilities

• Provide income to a surviving spouse while preserving assets for children

• Establish different strategies for children with different needs

• Direct the management or sale of real estate

• Create a succession plan for a family business

• Protect an inheritance from poor financial decisions

• Allocate certain assets to family and others to charity

• Continue charitable giving through a donor advised fund

• Distribute funds over time rather than in one lump sum

This flexibility also creates better opportunities for charitable planning. A donor may leave heavily taxed retirement assets to charity while directing more tax-favored assets to family. She may assign a percentage of the trust residue to several organizations. She may provide for loved ones first and distribute the remainder to charity. She may use a charitable remainder trust, charitable gift annuity, donor advised fund, or another structure as part of the broader plan.

The living trust becomes the architecture through which family care and charitable generosity can work together.

Dr. Russell James: Reported Wills Often Go Unused

Dr. Russell James examined what happened between estate plans reported during life and the assets distributed after death in Wills That Won’t: A 30-Year National Study of Charitable Planning.

Among 7,150 distributed estates in which the deceased person had reported having a signed and witnessed will, only 38% had a will that was ultimately probated. In 17% of the cases, no will was found. Other wills went unused because little property passed through them, assets were distributed through a trust, or the estate transferred by other means.

The results for funded living trusts were dramatically different.

Among 1,102 distributed estates whose owners had reported having a funded trust, the trust still existed and served as the distribution vehicle in 76% of the cases. Only 10% moved through a probated will.

This research does not suggest that every funded trust produces a charitable gift. It demonstrates that funded trusts are far more likely than reported wills to remain connected to the eventual distribution of the estate.

For charitable organizations, that distinction should reshape estate planning outreach.

A reported bequest intention is encouraging. Moreover, a charitable provision incorporated into a professionally prepared and funded living trust offers a more dependable path toward a materialized gift.

The Missed Opportunity for Charitable Organizations

Many organizations celebrate when a donor checks a box indicating that the organization is included in a will. That information is valuable, but it should begin a relationship rather than complete a transaction.

The organization should help the donor ask:

• How old is the current plan?

• Does it still reflect the donor’s family and will it accomplish what the donor really wants?

• Is the charitable gift included in a will or a trust?

• Has the trust been properly funded?

• Are beneficiary designations coordinated with the plan?

• Is the charitable organization identified by its correct legal name and EIN?

• Is the gift expressed as a percentage, a specific amount, or a residual interest?

• Has the donor consulted a qualified estate planning attorney?

The charitable organization should never attempt to provide legal advice. It can provide education, encourage professional counsel, offer accurate organizational information, help the donor clarify charitable goals, and remain involved until the planning process is complete.

That final point matters. Donors often attend a seminar, request information, or express interest and then stop. The documents feel complicated. The attorney appointment gets postponed. Assets never get retitled. The trust remains unfunded. The charitable intention lives in conversation but never becomes part of an operating plan.

A thoughtful follow-up process can help the donor cross that gap.

Why Estate Planning Seminars Matter

An effective estate planning seminar gives donors more than general information. It helps them understand the difference between:

• Doing nothing and allowing state law to determine the outcome

• Creating a will that will generally depend upon probate

• Establishing a living trust

• Funding the trust and coordinating all related documents

• Identifying how families or estates will be taxed while offering helpful solutions to reduce taxation to loved ones.

• Incorporating charitable intentions into a complete estate plan

The seminar should lead to access to qualified estate planning attorneys, educational follow-up, and personal conversations about the donor’s charitable goals. It should help donors move from awareness to action and from action to completion.

This is where charitable organizations can create extraordinary value. They help donors protect their families, reduce avoidable complications, and turn deeply held values into enduring instructions.

Promoting wills can introduce people to estate planning. Helping donors complete and fund their living trusts can carry that intention across the finish line.

For organizations seeking meaningful future bequests, that may be where the greatest opportunity has been waiting all along.