(Formerly Standard 28)
PGTS Standard
30. Signed receipts, releases or acknowledgments are requested and received, when practical, from all beneficiaries of matured trusts or estates. This means that the beneficiary signs a separate receipt or release, or signs an acknowledgment above the beneficiary’s endorsement on the check. Such receipt, release or acknowledgment shall verify that the distribution is “partial” or “full and complete” distribution to the beneficiary in harmony with the trust or will. Any other method shall be approved in writing by the entity’s local legal counsel. [PGP, PGTS]
Types of Maturity Distributions
There are two types of maturity distributions: those made to your organization and those made outside your organization. Those that are outside of your organization may be to other organizations, family members, or other individuals. An attempt must be made to obtain signed receipts, releases, or acknowledgments from all beneficiaries, including your own organization.
All receipts, releases, or acknowledgments must designate if the distribution is “partial” or “final and complete”. In addition, the terms of the Trust or Last Will & Testament must be followed and a statement to that effect must be included in the documentation signed by the beneficiary. Because state laws vary as to what you can or cannot require a beneficiary to do it is very important that your local legal counsel approve the process for attempting to obtain receipts, releases, and acknowledgments.
Two types of Receipts
There are two types of receipts, releases, or acknowledgments addressed in this standard. The first type is a separate document that is signed by the beneficiary and returned to your organization. To help facilitate the return of the signed receipt document you are encouraged to include a self-addressed and stamped return envelope. The second type is a stamped endorsement on the backside of the distribution check that when signed by the beneficiary may be found on the canceled check.
There are always a few beneficiaries that may be difficult to get to sign the receipt, release, or acknowledgment document. Your responsibility is to make a good faith effort to acquire the signed documents. You may create your own evidence of this effort by sending all distributions via certified mail, where the post office will collect the signature for you when the distribution is delivered to the beneficiary, and then keeping the returned signed receipt. This documentation must all be kept in the maturity file for the trust or estate.
Incorrectly signed receipts and missing receipts is among the most frequent findings on Trust Review reports. There are two standards that require Gift Planners or Trust Officers to issue or receive a receipt. Standard #19 deals with issuing receipts when PGTS personnel receive assets, this is not to be confused with receipts sent to beneficiaries receiving distributions from matured estates required in this standard.
Most of these findings can are avoidable when the organization uses the proper checklist to guide its processes. Checklists are required for managing trusts and charitable gift annuities by standard #25 but may be utilized for other tasks. For example, the checklist is a helpful reminder when working with many donors, trustors, and beneficiaries of matured trusts or estates that a receipt, release, or acknowledgment has been requested, and a checklist also helps you track which documents have been received and placed in the appropriate file.
Restrictive Endorsements
For distribution from trusts or estates where your organization issues a check to beneficiaries, in addition to the request for a signed receipt, it is suggested you use a stamp with the appropriate wording to match the type of distribution you are making, such as partial or complete. The wording may contain the release as well. This is a backup for the occasions the requested signed receipt is not returned. You should make a photocopy of both sides of the check to place in the file before it is sent.