Hundreds of thousands of dollars are at stake. So is the ability for these groups to continue working on their common goals.

Jun 28, 2024

A quiet legal battle is brewing between the Freedom From Religion Foundation and American Atheists, two of the largest and most influential atheist organizations in the country. Hundreds of thousands of dollars are at stake—and so is the ability for the groups to continue cooperating on their shared interests.

(Follow above article link to view original article with photos/PDFs.)

The issue dates back to 2021, when a man named Ronald L. Pelley died and his family had the responsibility of executing his will. Pelley had thankfully signed off on a Trust in his name that left quite a bit of money to a handful of non-profit organizations.

That document, signed and notarized in 2012, said that any money in Pelley’s name would, first, be used to pay off any remaining debts. After that, it would be divvied up as follows: 10% for his son (who would administer the Trust), 45% to FFRF, and 45% to Atheist Alliance of America.

(I would love to tell you more about AAA, but I have no clue what they do, and I do this shit for a living. In any case, they did not respond to a request for comment.)

There’s nothing unusual about someone wanting to leave money to his favorite charities in his will. In normal situations, the only question would be how much each beneficiary would get.

But in 2018, Pelley allegedly produced a handwritten document that is now the cause of all this controversy.

That’s because this document included what appears to be updated percentages for how he wanted his Trust to be disbursed… at least when it came to his IRA account and his Fidelity Charitable account. (I’ve redacted personal information in the image below.)

You can see in this memo that Atheist Alliance of America is no longer on the list, but American Atheists and Planned Parenthood were added to it. Both groups have the word “NEW” listed to their left. The word “SAME” is written next to Pelley’s son’s name and FFRF, presumably because they carried over from the original Trust.

According to this document, American Atheists would receive 15% of the IRA account and 25% of the Fidelity Charitable account. Planned Parenthood would get 50% and 40%, respectively.

Pelley’s son Robert would receive 20% from the two accounts, up from 10% in the original Trust. (FFRF suggested in a court filing that Robert was acting “selfishly” by prioritizing this document: “The suspicious 2018 Document seemingly would net this Successor Trustee at least an additional $81,000.00 into his own pocket.&rdquo

Most drastically, FFRF went from receiving 45% of Pelley’s Trust to getting only 15% of it.

That handwritten note was signed by Pelley but not notarized. Furthermore, there’s no reference on that note to the original Trust. Nor is there anything that suggests it’s an official “amendment.”

When Pelley died, his son (as Trustee) began acting on the 2012 Trust… but after the first batch of payments were sent out, he says he discovered the 2018 document and made relevant adjustments.

FFRF ultimately received just over $219,000 in two separate payments, the last one coming a year ago.

Doing some back-of-the-envelope calculations, if that represents 15% of Pelley’s estate (in the IRA and Fidelity accounts), then we’re talking about a pool of money worth about $1.5 million that Pelley left behind.

Let’s do some more math. (My numbers here are just estimates and should not be taken at face value.)

Had the original Trust been executed, FFRF would have received about $657,000 in total. Under the 2018 document, they received only $219,000. (FFRF’s most recent 990 tax form says it has assets worth nearly $24 million.)

American Atheists, which would have received nothing under the original Trust, got an estimated $292,000 because of the 2018 document. (Their most recent 990 tax form says the group has assets totaling about $2 million.)

In short, there’s a lot of money at stake here. There are also open questions regarding how much was actually in the Trust, which expenses were paid out, and to whom. Normally the person in charge of the trust (the son, in this case) would have to provide an accounting of all that information, making everything transparent, but FFRF says they haven’t received those documents.

In order to get those answers, this past March, FFRF filed a lawsuit in the Pima County Superior Court in Arizona (where the Trust was based) against Pelley’s son… as well as the recipients of Pelley’s estate based on the 2018 document.

On the surface, it looks like FFRF is suing American Atheists to recover the money they believe they lost, but that’s not how they see it. The group’s co-president Annie Laurie Gaylor told me this “is not personal.” They had to name American Atheists and the other groups in the lawsuit because they would all be impacted by a ruling. More importantly, FFRF has a “fiduciary duty” to make sure a donor’s wishes are being followed.

“Any responsible executive director of a nonprofit, dealing with such stonewalling, would do the same,” she said, referring to information and documents she says FFRF did not receive from Pelley’s son.

In the lawsuit, FFRF argued that the 2018 document wasn’t valid and that the money needed to be paid out according to the 2012 Trust that Pelley got notarized. Since the money was already distributed, though, that effectively meant taking money away from American Atheists a year after the group received and deposited the check.

I spoke to one non-profit lawyer who was shocked that American Atheists believed the money was already theirs. Normally, the lawyer said, groups don’t touch legacy donations like that, no matter the amount, until all the legal concerns have been definitively taken care of, and that takes time to settle. Better to act like the check’s not even there for a while.

That said, American Atheists also believed it had a duty to protect the donor’s wishes, so they asked the court to dismiss FFRF’s case in April. They cited Arizona law limiting challenges to a Trust’s provisions to one year after the person in question dies. FFRF’s lawsuit, they argued, was too late.

FFRF said in response that they only learned about the 2018 document well after the one-year deadline had passed, so that expiration date shouldn’t apply. A judge later agreed with that argument and rejected AA’s motion to dismiss.

American Atheists also said the 2018 document was valid despite it never getting notarized and that Arizona law backed them up on that. All that mattered was whether the document accurately represented Pelley’s wishes. They said the fact that the 2018 document had the words “SAME” and “NEW” on it amounted to an acknowledgment that Pelley wanted to change the original Trust. See? The two documents were linked after all!

Which document will eventually “count”? That’s for a judge to decide. In the meantime, however, there are a few other issues to think about.

Non-profit groups regularly ask donors to consider putting the organizations in their wills—something known as “estate planning.” FFRF and American Atheists both do this and Pelley took them up on it.

I fear that this lawsuit might hinder supporters of secular causes from leaving money—especially significant amounts of money—to atheist organizations out of fear that they didn’t dot every i or cross every t. After all, why create a potential hassle after they die?

Nick Fish, the president of American Atheists, told me he had “serious concerns” about the impact of this lawsuit for that reason:

At a time when charitable giving is on the decline and organizations are facing tremendous challenges, we absolutely worry this kind of litigiousness could discourage donors from participating not only in legacy giving and shared bequests but also in everyday, grassroots campaigns. Supporters of secular groups have every right to expect their contributions will be used in support of the organizations’ missions, not to attack partners. Our community should be working together to defeat the deep-pocketed Christian nationalists seeking to destroy church-state separation and dismantle our democracy. This unnecessary expenditure of resources to invalidate the wishes of a deceased benefactor of this community is really disheartening. 

The non-profit lawyer I spoke to, however, said donors shouldn’t be worried about that at all. All that really mattered was leaving the Trust in capable hands. So if Pelley’s son, in this case, is withholding documents or information, that’s the real problem here.

There’s also an institutional cost to this internal fight.

FFRF and American Atheists focus on different areas in the broader Secular Cinematic Universe, but they have overlapping interests when it comes to political and legal issues. They combat Christian Nationalism. They file lawsuits to protect church/state separation. Both groups are members of the Secular Coalition for America. Yet the court documents say that the two groups didn’t even consult with each other prior to the lawsuit. AA said in a filing that “FFRF principals declined to meet with American Atheists.”

Gaylor told me she did reach out to Fish about this—there’s an email backing her up, though it arrived months after the initial lawsuit was filed—and they only “declined to meet” because they first needed more information from Pelley’s son. They couldn’t get that information, she added, without litigation.

Yet that litigation is forcing American Atheists to shift its own resources to fight this battle instead of all the other ones.

They’ve spent “tens of thousands of dollars” in attorneys’ fees so far, Fish told me, and additional money has been earmarked to continue the case. That’s money that won’t be going toward other important projects. It’s worth the cost to them, however, if the end result means keeping the hundreds of thousands of dollars they believe Pelley wanted them to have.

Would the lawsuit affect the atheist groups’ shared goals? No, Fish said, but it “jeopardized trust and undermined our ability to work together in good faith.”

Gaylor believes that good faith still exists. These kinds of situations, she told me, are rare but necessary when it comes to dealing with trust and estate matters: “We're sorry to see a complicated legal situation being blown completely out of proportion.”