Two influential atheist groups have finally settled a case involving a donor's wishes

A dispute over a Trust led to a high-stakes lawsuit involving atheist allies

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A behind-the-scenes legal issue between the Freedom From Religion Foundation and American Atheists, two of the largest and most influential atheist organizations in the country, has finally been resolved. Given that at least hundreds of thousands of dollars were at stake and that these groups are almost always on the same side of various issues, I was personally curious how this would shake out.

Since it now appears to be settled, I’m reposting my initial article about the matter, followed by an important update.

Man signing contract (image via Adobe)

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 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.”)

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

That handwritten note was signed by Pelley but not notarized. Furthermore, there was no reference on that note to the original Trust. Nor was there anything that suggested it was 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 said he discovered the 2018 document and made relevant adjustments.

FFRF ultimately received just over $219,000 in two separate payments, the last one coming in 2023.

Doing some back-of-the-envelope calculations, if that represented 15% of Pelley’s estate (in the IRA and Fidelity accounts), then we were 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 said 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 said the group has assets totaling about $2 million.)

In short, there was a lot of money at stake here. There were 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 said they hadn’t received those documents.

In order to get those answers, this past March (in 2024), 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 looked like FFRF was suing American Atheists to recover the money they believed they lost, but that wasn’t how they saw 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 had a “fiduciary duty” to make sure a donor’s wishes were 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 said 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 (of 2024). 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, was withholding documents or information, that was the real problem here.

There was 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 both combat Christian Nationalism. They both file lawsuits to protect church/state separation. Both groups are members of the Secular Coalition for America. Yet the court documents said 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 forced 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 was earmarked to continue the case. That’s money that won’t be going toward other important projects. It was worth the cost to them, however, if the end result meant keeping the hundreds of thousands of dollars they believed 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 the 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.”

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That’s where this case was as of last summer.

But last Thursday, FFRF released a statement saying everything had finally been settled and there was good news all around.

… Last year, after years of nondisclosure and incomplete disbursement of the trust, FFRF was forced to bring suit to receive an accounting of the Ronald Pelley Trust. After the accounting was completed, FFRF identified mismanagement by the trustee and sought appropriate payments from the trust to all beneficiaries.

As a result, all beneficiaries, including FFRF and groups such as American Atheists and Planned Parenthood, have agreed on a settlement and have received substantial additional payments. As a result of the action FFRF took to ensure Ron Pelley’s instructions were followed, FFRF received the additional distribution it was owed from the trust, more than $800,000. American Atheists and other beneficiaries similarly received substantial additional payouts they were likewise owed, thanks to FFRF’s lawsuit.

“This story has a happy ending,” says Annie Laurie Gaylor, FFRF co-president. “It shouldn’t have taken a lawsuit in order to ensure that a donor’s wishes were honored, but it became necessary.” While it fortunately has been rare over FFRF’s 47 years of existence to sue over failure to receive lawful proceeds from a designated trust or estate, FFRF, from time to time, has had to take action to ensure the bequester’s wishes are honored.

My understanding of the terms of the settlement, since they’re not a public record, is that the amended document was eventually accepted as the donor’s wishes. However, because there were more assets than just a couple of retirement accounts, there was a larger pool of money than initially suspected.

(To put it another way, two people might fight over receiving 10% or 20% of $1,000… but if the amount in question turns out to be $100,000, you’ll both end up with more money regardless of which of those percentages you get.)

So it’s true that all the groups involved walked away with more money, just as the donor intended. That’s the “happy ending” FFRF was referring to. At the same time, though, this lawsuit took up a lot of time and tens of thousands of dollars in legal fees, not to mention all the bad blood it may have generated.

FFRF also says that “thanks to FFRF’s lawsuit,” American Atheists and other groups “received substantial additional payouts they were likewise owed.” But it’s hard to reconcile that with the initial court filing in which FFRF specifically asked a judge to remove American Atheists as a beneficiary altogether.

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FFRF doesn’t normally issue press releases regarding legacy donations, but they said they were doing it now because they had “received questions from supporters about this issue over the last year,” presumably as a result of my earlier piece. Without mentioning me, they suggested the framing of my article was incorrect:

… It was disappointing that, before the resolution of the case, this issue was falsely portrayed to the public as a story about infighting or even as an attempt to cheat another group of its bequest — when the opposite was true.

“As we have said from the start, our dispute was with a trustee whose inaction unfortunately necessitated court intervention. We are so grateful to Ron Pelley for making such generous provisions for FFRF’s future,” Gaylor added.

I stand by my earlier piece. I believe FFRF wanted to fight on behalf of their donor’s wishes. I just don’t know if going to court was the only way to settle this matter. Based on the records I had access to, this wasn’t decided by a judge but rather by the attorneys for the various sides.

I was also very curious how Atheists Alliance of America planned to spend the money they received—because they did receive something substantial—given that the group has apparently morphed into a different one that focuses on mindfulness and “self-actualization.” But the group’s leader did not respond to a request for comment.

American Atheists issued its own statement about the settlement. Without mentioning any numbers, they just said they were relieved this was over while making clear that potential donors shouldn’t be discouraged by this incident.

We are pleased to put this matter behind us and move forward in the fight to defend the separation of religion and government. This week’s resolution allows our organization to remain focused on the issues that matter most to our members and again dedicate all our attention and resources toward the critical issue of our time: safeguarding secular democracy and Americans’ civil rights from the Christian nationalist crusade.

As a nonprofit organization, we are incredibly grateful for the generous support of all our members and donors. We consider our financial contributors to be valued partners in our work, and we understand planned giving requires a heightened level of care. We take seriously the trust our members, supporters, and donors place in us to be wise and respectful stewards of their contributions — particularly those that are intended to leave a lasting legacy for years to come.

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