An Inter Vivos Gift Is Irrevocable Unless Donor Can Establish By Clear And Unambiguous Evidence That The Gift Was Conditional
In the trust and estate litigation case of In Re Found for Anglican Christian Tradition, PICS Case No. 14-1792 (Pa. Commw. Nov. 5, 2014) the Honorable Dan Pellegrini held that the circumstances by which appellant gave his charitable gift failed to evidence clear and unambiguous language of intent to create a charitable trust to grant appellant standing to force the recipient foundation to exercise a right of declaring default. Order of the trial court affirmed.
David Rawson appealed from the order of the trial court sustaining the preliminary objections filed by the Foundation for Anglican Christian Tradition and the Church of the Good Shepherd, and dismissing Rawson’s petition to enjoin the foundation and church from using a charitable gift given by Rawson.
Rawson alleged that he personally donated funds to the foundation and assisted it in raising additional funds “for the purpose of supporting Biblical and traditional Anglican Christian principles”, and to purchase real property adjoining the church in exchange for a note and mortgage on the property. Rawson additionally alleged that he subsequently demanded that the note be amended to guarantee that the church would continue to follow the foundation’s principles and the direction of Rawson, by providing that the church would be in default if a majority of the members of the church’s vestry were removed except as the result of annual elections pursuant to the church’s bylaws, and that the foundation would have the option of demanding the unpaid balance and interest immediately. Rawson further alleged that after the note was amended, a majority of the vestry’s members were replaced outside annual elections, and that to avoid losing the property, the Foundation declared the mortgage null and void and filed a satisfaction of mortgage without receiving any principal or interest on the note.
The foundation and the church filed preliminary objections, arguing that Rawson failed to allege the creation of a charitable trust, and that he lacked standing to enforce one. The trial court sustained the objections, finding that Rawson’s donation and fundraising efforts did not empower him to challenge the foundation’s corporate decisions, nor was he a board member or officer of the foundation, and that his only interest was in being a “proponent of Biblical and traditional Anglican Christian principles”.
Rawson argued that, as the settlor of a charitable trust or donor of a charitable gift, he could enforce the conditions placed on his donation. However, the court held that, in order to create a charitable trust, a purported trust instrument must have clear and unambiguous language of intent to create a trust. The court found no evidence of such language.
The court further ruled that Rawson’s status as a donor of a charitable gift was insufficient to confer upon him standing to enforce the Foundation’s option to declare a default, as Rawson was not a party to either the note or mortgage. Furthermore, the court noted that inter vivos gifts were generally irrevocable, and that a donor bore the burden of establishing that the gift was conditional. The court held that Rawson’s insistence on the note amendment was insufficient to establish any condition on his gift, since the amendment was made after Rawson’s donated. Accordingly, the court ruled that since Rawson could not establish the existence of a condition on his gift, he lacked standing to enforce any conditions.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 37 PLW 1106 (November 18, 2014)
Filed Under: Estate Planning, Trust & Estate Litigation: Charitable Gifts; Charitable Trusts
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