Dear Rick:
I have a couple questions that I hope you can help me with. Earlier this year my uncle passed and my sister and I were the beneficiaries of everything. My uncle did not have a will, but he had beneficiaries on everything. We have collected on everything, closed out his accounts and paid all the bills. A few years ago my uncle said that upon his death he wanted a scholarship set up at his alma mater. As I mentioned he did not have a will and he never put anything in writing. My first question is do my sister and I have any legal obligations to set up a scholarship? If we do have an obligation, what would be the best and easiest way to arrange that? Neither my sister nor I would want to be involved in the scholarship in any way other than setting it up.

Thank you.
LouAnn

Dear LouAnn:
You and your sister are not under any legal obligation to establish the scholarship. Your uncle never put his wishes in a legal document such as a will or a trust and thus, you are not bound whatsoever.

It is important for people to realize that if they have wishes for their assets upon their death, they must put it in writing. After all, if someone doesn’t put it in writing you have no idea if they changed their mind later, if they really meant what they said, or if it was just something that they were thinking about. The bottom line, if you want to make something enforceable, it has to be in writing. Therefore, if you want to make sure that your money goes to who you want upon your death, whether it’s to a charitable organization, a loved one or a friend, it is imperative that you put it in writing. In addition, you also have to make sure that the document is not one that you just handwrite out, but rather meets the requirements of the law such as being properly witnessed.

If you decide that you do want to establish a scholarship, and at the same time you don’t want to have any day-to-day involvement in the administration of the scholarship, the easiest way is to contact the university directly. Just about every university is going to have some sort of development department that can help you establish the scholarship. Typically, as a donor, you can set the criteria for the scholarship. For example, you can specify the field of study, whether the scholarship is awarded based upon merit or financial need as well as other criteria such as a scholarship for veterans. At most universities, establishing a scholarship in someone’s name will typically require a financial commitment of somewhere between $25,000 and $50,000. In addition, at most universities, you can also contribute to an existing scholarship through the university.

Making a charitable contribution or establishing a scholarship upon death is admirable, and is certainly a great way of leaving a lasting legacy. However, as I mentioned earlier, to make sure your wishes are complied with, you must put it in writing. Telling your loved ones or relatives what you want is not binding and could cause problems within the family. After all, unless something is in writing, it is open too much to interpretation. Therefore, to make things clear and to promote family harmony you must put your wishes in writing. In fact, as a reminder, whether you’re leaving money to a charity or not, it is important for all adults to have a will that is current. If you have not done a will or trust, or if you haven’t reviewed your will or trust lately, there is no time like the present.

Good luck!

If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com.