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Honouring your Parent’s Pledge to Charity

Still today, I remember the Rosh Hashanah of my youth and especially the awe I felt hearing Chazzan Weiss’ Unetane Tokef Prayer. As a child, hearing the congregation chant the prayer “Repentance, Prayer and Charity reverse the evil decree” made me think. If I give charity, does G-d consider himself bound to change the decree? Now as an adult, given my profession and with my tongue planted firmly in my cheek, I cannot help but also wonder whether our estates would be bound by charitable pledges if the Master of the Universe, G-d forbid, did not keep his side of the bargain.

As you can imagine, there are times when a person makes a pledge to a charity and passes away before the pledge is honoured. Do you think the family should still honour that pledge? Is there a legal obligation to do so? This issue was addressed in Brantford General Hospital Foundation v. Marquis Estate (2003), 2003 CarswellOnt 5857  (Ont. S.C.J.). In this case Dr. Marquis donated $2.8 million to the hospital. In exchange, the hospital named its coronary and cardiac unit after him. Mrs. Marquis pledged an additional $1 million over five years. After she died there was $800,000 outstanding on the pledge. The estate refused to pay and the hospital took them to court.

The hospital argued that the pledge was a legally enforceable contract and furthermore, given that Mrs. Marquis paid part of the pledge there was part performance of the contract. The hospital argued that this was proof that the contract existed. In the alternative, the hospital said the estate was estopped from saying there was no contract. Estoppel is a legal argument under the law of equity. The hospital was saying that once part payment was made the hospital relied on that conduct to its detriment and the estate should not be allowed to back out of the pledge. Do you think the hospital was right? The Ontario court did not.

The Ontario court followed precedent and once again said that a promise to a charity is not enforceable unless the charity gives consideration (something in return) to the donor. This is basic contract law. The honours given to the Marquis did not count.

Please note that in a very similar case in New York (College v. National Chautauqua County Bank of Jamestown) the court came to an opposite conclusion. The fact that both New York and Ontario are common law jurisdictions and came to different conclusions should tell you that this issue is not a simple one.

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Toronto Estate Litigator - Charles Wagner

The author of this blog is Charles B. Wagner. Charles is a Certified Specialist in Estates and Trusts and partner at Wagner Sidlofsky LLP.

This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

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