What Happens to Crowdfunding Money if You Die During a Fundraising Campaign?

A few years ago, a young man called Sam moved into a block of flats near Maidenhead. He started to notice an 85-year-old woman called Dorothy who lived in the flat across the hall.

Curious to hear Dorothy’s life stories, Sam began stopping by to see her regularly. Sam quickly discovered that Dorothy had no family, but she did have a long list of health problems. But she was also a heroine, having served in the Women’s Royal Army Corps during the 1960s and 1970s, including being deployed to Northern Ireland in 1969 at the height of “The Troubles”.

Sam started to help Dorothy with everyday tasks, as her health began to decline. By the time Dorothy reached the age of 89, he had lost her ability to walk, was constantly falling, and suffered from severe asthma attacks throughout the night. Sam did everything he could to help.

Eventually, Dorothy deteriorated to the point that doctors and the local social services team determined that she could not live at home without 24-hour care. Wanting to keep Dorothy from being placed in a nursing home, Sam took it upon himself to raise money to fund professional 24-hour home care for Dorothy.

Sam decided to crowdfund the necessary amount of money. When he first launched the crowdfunding campaign, he estimated that the cost of professional care for Dorothy would be around £1,500 per week. He set the campaign goal at an ambitious £78,000, which would cover one year’s care costs, and began sharing the campaign link.

Sam’s crowdfunding campaign quickly went viral and, before he knew it, the campaign had surpassed the £78,000 goal. Sam moved Dorothy into his flat, set her up in his spare bedroom, and hired around-the-clock professional care for her. The crowdfunding campaign ended with an astonishing £99,138 raised, which was enough to fund all of Dorothy’s care. The generosity of everyone who donated to the campaign, along with the inspiring compassion demonstrated by Sam, allowed Dorothy to live out her last few months comfortably and happily.

But what would happen with any leftover money after Dorothy died? Is the money part of Dorothy’s estate, or is it Sam’s property? Or what about if Sam had died during the crowdfunding campaign – would Dorothy still be entitled to receive the money he had raised? How would Dorothy access the money if she were entitled to it?

Crowdfunding is the concept of using crowds to collect funds. Examples of crowdfunding platforms include GoFundMe, Funding Circle UK and Crowdfunder.

A major dilemma in regard to crowdfunding is how to recover funds if the campaign owner passes away before withdrawing the campaign contributions. GoFundMe, for example, requires the first withdrawal be requested manually by the campaign owner while they are logged into their GoFundMe account. If the campaign owner executes the initial withdrawal, then all future contributions to the campaign will be automatically deposited in the campaign owner’s bank account.

However, if the campaign owner does not execute the initial withdrawal within 30 days, GoFundMe will prevent the campaign from accepting new contributions. If the campaign owner does not execute the initial withdrawal within 60 days, GoFundMe will refund all of the contributions back to the crowdfunders. Therefore, if the campaign owner failed to leave the account login information with an interested party, it may prove difficult for anyone to login to the campaign and manually withdraw the funds from the campaign.

So would Dorothy’s estate or Sam receive the leftover money from the crowdfunding campaign if Dorothy died? This will depend entirely on how Sam decided to set up the crowdfunding campaign when he indicated whether or not the beneficiary was someone other than himself.

If Sam set up the campaign to have all funds deposited into his personal bank account, and then he was personally giving those funds to Dorothy, it seems Sam would have no obligation to give the remaining funds to Dorothy’s estate.

If instead Sam had set up the crowdfunding account to have all donations directly deposited into Dorothy’s personal account, Sam would have no claim to the funds and anything leftover would be part of Dorothy’s estate.

But what if Sam died during the campaign – would that affect Dorothy’s ability to receive donations? Again, if Sam had set up the campaign to automatically deposit funds into Dorothy’s account, Dorothy would continue receiving donations so long as the campaign remained active online.

However, if Sam was personally receiving the funds, then Dorothy may face greater difficulty claiming title to the donations. If Sam did not indicate that there was a beneficiary when he established the campaign, Dorothy likely has no claim to the money.

While the issues surrounding crowdfunding seemed complicated at first, the solutions to most problems can be easily resolved. In most cases, a deceased campaign owner will have already set up automatic withdrawals from the crowdfunding account into their personal bank account. In these situations, the executor can access a bank account with a Grant of Probate and/or a death certificate.

If you would like more information about this, or would like to talk to someone about obtaining probate, please contact any member of the Private Client team on 0118 958 9711.

Further Reading:

Meet the Private Client Team – Rebecca Pykett, Trainee Solicitor

The computer never lies: or does it?

Should I close social media accounts when someone dies?

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Jane Whitfield can meet with you to discuss your personal circumstances, your options and your next steps. This would normally take place in our office in Reading, Berkshire. During the coronavirus situation, however, all of our meetings are currently being carried out either by telephone or by video link.

If you would like to meet with Jane, please telephone the office so that an appointment can be made for you. If you would like to take up our offer of a one-hour £95 fixed fee meeting, please click for more details.

Jane is a Solicitor specialising in Private Client matters. Jane is a qualified Trusts & Estate Practitioner with STEP (Society of Trusts & Estates Practitioners) and a fully accredited member of Solicitors for the Elderly, as well as being a Dementia Friends Champion. Jane is also President of the Berks, Bucks & Oxfordshire Law Society.

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