It is common for wealthy people to make pledges to donate money to charity at some future date. Doing so gives the wealthy person time to come up with the liquid assets to donate, if necessary, and lets the charity know when to expect donations.
It also allows donors to keep their assets and profit off them in the time between when the pledge is made and when it is fulfilled. However, what happens if the pledge is not fulfilled?
The answer to that question has been in the news recently as Duke University filed a lawsuit against the estate of Aubrey McClendon and her $10 million unfulfilled pledge.
The Wills, Trusts & Estates Prof Blog looked at some ways a court might decide to enforce the pledge in "History of Charitable Pledges."
Basically, courts will first look to see if there is an enforceable contract, either bilateral or unilateral. Failing that, the court might try to use a legal doctrine known as “promissory estoppel.” In layman's language that means something like, "You made a promise and the other party relied on it. You received some benefit from your promise, so you should not be able to disavow it."
The bottom line is that the legal system has a public policy preference of seeing that charitable pledges are fulfilled and will seek legal ways they can be enforced.
Reference: Wills, Trusts & Estates Prof Blog (Oct. 9, 2016) "History of Charitable Pledges."
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