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Estate planning - naming HOA in will

Started by MichaelT21 • 8 replies • 278 views

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MichaelT21 (Arkansas)
Posts: 501
Posted:
Curious if any homeowners have ever left money to the HOA in their will?

I hear ads on public radio encouraging us to leave money to them in our estate planning. no interest in that. However, was wondering if sometimes homeowners gift money to the HOA in their neighborhood.

I sort of doubt people do this, but perhaps it happens in the 55+ communities?
CathyA3 (Ohio)
Posts: 6,299
Posted:
Yes, in one of the 55+ communities in my area people have named the HOA in their will. The community has a "memory garden" where you can see bricks, benches and other items with the person's name on them. I haven't heard of it happening in other communities, but there's no reason it can't.
ThadC2 (Florida)
Posts: 820
Posted:
there are so many better charitable non profits one can give money to, schools, museums, etc. What a waste to go towards an HOA.
MichaelT21 (Arkansas)
Posts: 501
Posted:
Quote:
Posted By ThadC2 on 06/10/2022 4:48 PM
there are so many better charitable non profits one can give money to, schools, museums, etc. What a waste to go towards an HOA.

Our HOA owns 5 parks. In the 5 parks are 3 children's play areas, two basketball courts, one picnic area, and one all-ages play area. I can think of little better to give money to than the neighborhood park system in the neighborhood where a homeowner might have resided for a good part of their life.
ThadC2 (Florida)
Posts: 820
Posted:
Quote:
Posted By MichaelT21 on 06/10/2022 4:56 PM
Posted By ThadC2 on 06/10/2022 4:48 PM
there are so many better charitable non profits one can give money to, schools, museums, etc. What a waste to go towards an HOA.


Our HOA owns 5 parks. In the 5 parks are 3 children's play areas, two basketball courts, one picnic area, and one all-ages play area. I can think of little better to give money to than the neighborhood park system in the neighborhood where a homeowner might have resided for a good part of their life.

maybe in theory, but it could also be usesd in the wrong boards hands to pay for suing your neighbors. Most HOA's are only 2 hawkish board members away from becoming a totalitarian regime.
CathyA3 (Ohio)
Posts: 6,299
Posted:
Bequests often come with strings attached. It's very common for people to spell out how they want their gift to be used, and the recipient is legally obligated to carry out these instructions. (Ask me about the dorm on my alma mater's campus that had a 20' high wall around it, the kicker being that the wall was underground.)

In theory an unscrupulous board could misuse the funds. But anyone who thinks about this for a minute will see how counterproductive that is when you have a group of potential donors who are in a position to find out that previous gifts have been misused.
ThadC2 (Florida)
Posts: 820
Posted:
Quote:
Posted By CathyA3 on 06/11/2022 5:36 AM
Bequests often come with strings attached. It's very common for people to spell out how they want their gift to be used, and the recipient is legally obligated to carry out these instructions. (Ask me about the dorm on my alma mater's campus that had a 20' high wall around it, the kicker being that the wall was underground.)

In theory an unscrupulous board could misuse the funds. But anyone who thinks about this for a minute will see how counterproductive that is when you have a group of potential donors who are in a position to find out that previous gifts have been misused.

or the hoa board could just not do maintenance, have a pole fall on a 15 year old kids head and the HOA would be on the hook for $20 million in damages.
https://independentamericancommunities.com/2018/03/06/homeowners-of-lamplight-village-fear-fallout-from-20m-verdict/

MelissaP1 (Alabama)
Posts: 13,836
Posted:
I am not sure this would actually be beneficial option to either party. A HOA is a non-profit but not charitable one. I would think any kind of inheritance would come with a tax ramifications to it. I would see most of it going to taxes. You should not use your HOA as a "tax shelter". I would not do this as it doesn't seem all the way thought through on either end. A HOA is to be funded by Dues not donations or fines...
Former HOA President
CathyA3 (Ohio)
Posts: 6,299
Posted:
In the example I mentioned, the donations are pretty modest - eg. to pay for a park bench or a paver for the memorial garden. Donors are mostly looking to be remembered by their neighbors and to do something nice for them.

Good point about HOAs not being charitable organizations. But they are non-profits and the IRS will have something to say about how they make their money and how much these donations would be taxed. I could see how donations may be more trouble to the HOA than they're worth.

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