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Ask Michael Lykken, Esq Your Own Question
Michael Lykken, Esq
Michael Lykken, Esq,
Category: Business Law
Satisfied Customers: 103
Experience:  Partner at Soares & Lykken, Attorneys at Law
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My brother in law starter a 501c3 after my husband was

Customer Question

My brother in law starter a 501c3 after my husband was killed in an accident . It was for the Benicia of his wife and daughter as I was told . To date it has not paid one cent on our behalf . Now my brother in law is offering it to me as payment for some of my husbands estate assets .is thus even legal ?
Submitted: 1 year ago.
Category: Business Law
Expert:  Michael Lykken, Esq replied 1 year ago.

Hello, my name is ***** ***** I am a licensed attorney in California. I do a lot of work with formation and operation of 501(c)(3) nonprofits. First, I'm sorry about your husband. Also, which state are you located in? Second, have you seen the articles of incorporation of the company? A 501(c)(3) corporation is a public benefit corporation, so it really can't have you or your daughter as beneficiaries. Aside from that, even if the company was a nonprofit, your brother-in-law could not use the money from the nonprofit to pay buy some of your husband's assets from you. That money has to be used in its charitable purpose. If the IRS does not have a letter granting the company 501(c)(3) status, then it really isn't a non-profit yet either. I hope this helps, and let me know of additional questions you have.

Customer: replied 1 year ago.
I'm in ny. None of this makes sense to me . No I have not see the articles of incorporation . What I know is I have been offered transfer of ownership of this foundation several different times all relating to his personal gain . I do not know what the money can be spent on ,I only know how it was soclidted and that I was told it had to be used for our direct care of my daughter or me.....Any bill. I'm just concerned its not legal . How do I know ? Can you transfer ownership of such an account . Yes There is a letter granting it a charitable status .
Expert:  Michael Lykken, Esq replied 1 year ago.

You may have a grant of foundation status from NY, but the IRS would have told you if there was a charity or foundation so long as you gave them the name or federal employer identification number of the foundation/charity. Assuming that there is an actual non-profit in existence which has the sole purpose of benefiting you and your daughter, your brother-in-law would not be able to offer to pay you the funds from the foundation (which were collected to benefit you and your daughter) in exchange for assets from the estate. Money from the foundation could be used to pay bills, but he could not ask for any assets in return for paying bills. Really, you need to see the documents that form the non-profit, such as any bylaws, any formation documents, the kind of entity it is, and what exemption it has (there are more than just 501(c)(3) entities).