Dealing with Toxic Succession Issues
Many high net worth individuals face the prospect of passing significant environmental cleanup liabilities to heirs and successors at death (toxic succession). Unfortunately, these high net worth families often don’t receive appropriate advice on how to plan for these contamination issues, and the toxic succession problems they face are often much more pronounced than they need to be. When environmental contamination does occur, it can lead to prolonged litigation, decrease the value of the estate, and significantly delay any intended distributions to foundations and charitable organizations.
Chemical contamination of real property can occur from any of numerous commercial, industrial or agricultural sources, including gasoline service stations, dry cleaners, chemical or pesticide storage, and manufacturing operations. The contamination can impact both soil and groundwater, and can lead to liability for significant cleanup costs, often in the multi-million dollar range.
It is important for planned giving professionals to reach out to potential donors during the succession planning process to discuss potential toxic succession issues. Donors need to conduct up-front planning in order to avoid passing potentially serious environmental cleanup liabilities to the estate at death. In many instances, by planning ahead, contaminated real estate can be cleaned up and become an important asset of an estate, thus actually increasing the overall asset base of the estate, preventing unnecessary litigation, and enabling even larger gifts to charity.
•Campaign 5000: Toxic Succession Whitepaper
•Planned Giving Today article by Kevin Daehnke
•Contaminated Property: Proactive Planning Strategies to Maximize Estate Value and Avoid Draconian Results
•Environmental Cleanup Costs: Professional Negligence for Failure to Warn Successors and Beneficiaries