Charity for the 'Death Tax': The Impact of Legislation on Charitable Bequests

32 Pages Posted: 10 Aug 2010

See all articles by Kristine S. Knaplund

Kristine S. Knaplund

Pepperdine University - Rick J. Caruso School of Law

Date Written: August 2010


The national debate over the federal estate tax has caused fear in American charities over the past ten years, a fear that is likely to continue for the foreseeable future. Since Congress acted in 2001 to repeal the “death tax” for one year, for decedents dying in 2010, charities and individuals have become increasingly concerned about the impact of a repeal on charitable donations. While only a small percentage of charitable gifts come in the form of gifts at death, these few but generous incidents in fact amount to billions of dollars, and are imperative to the operation of our charities. Today, the vast majority of estates are already exempt from the tax. If the estate tax is repealed, or, as widely expected, the exemption simply remains at the current $3.5 million, will those testators exempt from the estate tax in turn exempt charity from their estates?

Legal literature has addressed many of the factors that affect whether a testator gives to charity, including tax laws, the economy, the individual decedent’s wealth, the family members the decedent leaves behind, and the financial status of each. This article will focus on one factor that has been, thus far, largely ignored: state laws that impede gifts to charity at death. While true mortmain statutes are rare in the U.S., such impediments do still exist and must be examined in order to fully appreciate the impact on charitable donations.

Part I of this article discusses the federal estate tax enacted in 2001 and the potential impact on charities if a repeal is made permanent. Part II traces the history of federal estate tax law and charitable exemptions or deductions and contrasts the federal law with state limitations on charities, especially churches, and testators by examining four types of state statutes that serve as impediments to charitable giving: state laws designed to protect testators from overreaching by charities; state laws designed to protect testators’ families from a testator who is giving away too much; state laws designed to raise revenue from taxing charities; and true mortmain statutes, which limit the amount or value of property a charity can hold. Part III looks at our current laws, beginning with the Revenue Act of 1916, to see how many of these state laws still exist. Part IV concludes the article with a prediction of charitable donations in the future.

Keywords: estate, will, death tax, charitable, bequest, estate tax, tax, federal, state, decedent, financial, repeal, charity, family, revenue, mortmain, property, Revenue Act, donation, wealth, church, religious, legislation, statute

Suggested Citation

Knaplund, Kristine S., Charity for the 'Death Tax': The Impact of Legislation on Charitable Bequests (August 2010). Gonzaga Law Review, Vol. 45, 2009/10, Pepperdine University Legal Studies Research Paper No. 2010/15, Available at SSRN:

Kristine S. Knaplund (Contact Author)

Pepperdine University - Rick J. Caruso School of Law ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States

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