I own a co-op, and don’t have any outstanding loans on it. I’d like to leave it in my will to the American Red Cross, who could then sell it with the board’s approval and keep the proceeds (rather than make my executor deal with selling and then passing along the proceeds). Can I simply assign the shares now by filling out the back of the stock certificate, or should I reissue my shares to my living trust and have the executor of my estate make the transfer? What’s the best way to set this up?
Though it will be more work for your executor, your best course of action here is, indeed, to have them sell off the apartment and donate the proceeds after your death, say our experts.
“While a shareholder in a co-op may leave the economic benefit of ownership to a charity, they can’t set up a transfer of occupancy rights without consent of the co-op’s board of directors,” says Jeff Reich, an attorney with Schwarz Sladkus Reich Greenberg Atlas LLP.
And it’s not wise to try to make the transfer happen simply by writing on the back of your stock certificate.
“That would show intent, but not a clear plan,” says Norris McLaughlin & Marcus attorney Dean Roberts. “And you would still need someone to put that plan into effect.”
He adds that the easiest move would be to have your will specifically state that the apartment will be sold and the proceeds given to charity. This will entail more work for your executor, as they’ll have to sell your apartment, but that will be the case in essentially every possible scenario here.
(Assigning the shares to your living trust is a viable option as well, says Roberts, so long as you make sure to designate the charity as the trust’s beneficiary.)
Either way, he also recommends letting the Red Cross know about your plans ahead of time, so they can plan accordingly.
To get your donation lined up, Reich recommends consulting with the attorney who’s preparing your will to make sure the bequest is properly made, and also letting the co-op board know about your plans. “This will minimize the chances that the shareholder’s intent will be frustrated after the shareholder is gone,” he says.
While a co-op would need to approve a direct transfer, you’re well within your legal rights to use proceeds from a sale however you choose.
(And the board would eventually approve whoever buys the place anyway, as part of the sales process, meaning there shouldn’t be too much cause for their concern here.)
But if you’re concerned about making life easy for your executor, it never hurts to have the co-op board on your side.
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