Estate Donations that don’t get made
John Quinn was a corporate lawyer and Wall Street titan. A bachelor known for his many lovers, Quinn was also America’s first great modern art collector and tireless public champion. He was a friend of literary and art legends like Picasso, WB Yeats, and Joseph Conrad. Quinn died in 1924 of cancer with an 8-year-old Will. He was 54. His only beneficiaries were his sister and niece, neither who were close to him.
There are reports that Quinn had second thoughts about his estate plans just before he died. He wanted to keep his matchless collection intact, somehow. The problem was there was no museum willing to receive his challenging art – and Quinn had no faith that the public would be interested. He wanted to establish a museum of modern art in New York City but was years ahead of his time. (Museum of Modern Art was founded in 1929 but didn’t have a building until 1939.)
Quinn owned hundreds of artworks, including masterpieces like Henri Rousseau’s The Sleeping Gypsy and Picasso’s Three Musicians. After a single lightly attended exhibition in New York in 1926 his executor sold the art at auction, mostly in Europe. And then US museums – including Museum of Modern Art – spent the next 50 years trying to track down and purchase the lost works.
Charitable bequests that never get made – but could have with under different circumstances – are surprisingly common. I’ve had several personal experiences with donors and clients over the years. There are a few recurring challenges.
Reasons for Failed Gifts
Procrastination tops the list of estate planning sins. We all have time until we don’t. I had one client who spent three years planning a detailed charitable legacy – only to have her die without completing her new will.
Societal expectations. Most cultures have strong expectations that family members are the only legitimate heirs. Charities, by contrast, are beneficiaries that require thought, trust, and planning. Family members are conventional, default beneficiaries – even if the testator has no active relationship with them.
Uncertainty about charities or charitable purposes. John Quinn was unable to identify an institution to accept his art. Sometime testators just don’t know which charity to support, which produces delays and failure. Uncertainty led Quinn to take the safe, conventional route of naming a family beneficiary.
Lack of professional support. Getting expert support to plan and execute charitable donations is key. Lawyers who are experienced, practical, and efficient will ensure will get executed. They need to solve legal challenges – and to be supportive of the donor’s charitable spirit.
Failure to name a foundation as a beneficiary. A foundation structure can help bridge gaps in time. It can provide legal beneficiary and tax certainty while providing time to carry out the charitable purpose in the future. If Quinn had bequeathed his art to a foundation with instructions to find the right home for the art in the future, perhaps the collection would have been kept intact and put in trust for public purposes.
Sometimes the desire to make an estate donation runs smack into a wall of practical and emotional obstacles that would-be donor can’t overcome. It’s a constant challenge for estate planning professionals to understand true intentions – perhaps not fully articulate – and ensure they are acted upon.