If you and your spouse have made it a point to share your wealth with causes and organizations as a couple, you may need to untangle some of your charitable commitments as you divorce. If you’ve simply written sizeable checks or purchased needed materials, you can still do those things individually. However, if you’ve created one or more charitable entities together, you’ll need to determine what happens with those.
Any substantive change in donations can seriously affect a non-profit organization. You want to be certain that you’re not leaving an organization that has come to count on you in the lurch. This can affect their plans for the upcoming year or more. It will take some planning and mutual cooperation to divide your philanthropic assets and obligations.
Do you have any charitable entities?
When you place assets in a charitable entity, those assets are no longer legally yours, even though you are probably directing their use. Among the most common charitable entities are:
- Charitable remainder trusts
- Donor-advised funds
- Private foundations
If you’ve already made pledges or planned gifts, you’ll need to determine how responsibility for fulfilling those will be divided. As noted, not fulfilling a commitment can seriously hurt a charity. It could potentially even open you up to a lawsuit.
There are myriad ways to divide your “charitable footprint” as you divorce. It will depend in part on what your individual interests are. This isn’t something that has to be – or even should be – done immediately. However, you should let organizations know if the amount they can continue to expect will change significantly in the future so they can find new donors.
It’s wise to consult with your financial and tax advisors as well as your philanthropy advisor if you have them in addition, of course, to your legal team as you work through this part of your asset division.