Interpreting charitable gifts in wills – a recent case

The Legacies team at Foot Anstey recently represented The Donkey Sanctuary in relation to a will construction claim to determine whether they would benefit from a gift of residue where they had been identified incorrectly.

Background

Marjorie Thompson died on 9 April 2020, leaving a will dated 26 May 2016 and a codicil dated 20 October 2017. Under the terms of Ms Thompson's will, she left her residuary estate to fifteen organisations in equal shares. Her estate was valued at £1.48 million.  

Seven of the organisations could not be easily identified and the executor made an application to the court to determine the validity of the gifts and the identity of the organisations that should benefit. The court, therefore, had to assess whether any gift of residue lapsed, whether it passed on intestacy or whether it should be applied cy-près.

What was the Court asked to consider?

Initial due diligence had been undertaken by the executor to establish who the intended beneficiaries may be. This involved a review of earlier wills, a review of will files, seeking further information from the will drafter and looking at Ms Thompson's bank statements for a history of charitable donations. When these investigations failed to provide enough clarity, an application was made to the court to construe the words of the gift to identify the intended recipients.

When considering the question, the court first had to establish whether the gifts were to entities that existed as of the date of the will and what that entity was. If no such entity existed at the date of the will, or it was unclear which entity was intended, the court then had to establish whether the gift could be saved for charitable purposes and applied under the doctrine, cy-près.

The issue for The Donkey Sanctuary was the address that was included for them in the will was misspelt and related to a former charity which had previously operated at that address. That charity subsequently merged with South Western Donkey Sanctuary, now known as The Donkey Sanctuary.

The court had to consider the history of the operation of that charity at that address and the operation of The Donkey Sanctuary now. Thanks to the detailed and helpful witness statement put forward by The Donkey Sanctuary about the history of the organisation, the court was satisfied that they could construe a gift of 1/15 share to The Donkey Sanctuary.

Upon review of evidence relating to the other possible six charities, the court was also satisfied that the other six charitable gifts could be saved.

What is the significance of this case for charities?

The case illustrates how important it is for will drafters to ensure they correctly identify the charity that the testator is seeking to benefit and describe it correctly. The best practice would be to include a registered charity number, the correct address and name of the charity as of the date of the will as per its details on the Charity Commission Website.

Charities are already very good at making sure all of this information is easily accessible for will drafters and smaller charities may benefit from ensuring they include example clauses in their legacy literature.

The court also commented on how the evidence provided by the charities regarding the structure and evolution of their charities greatly assisted it in being able to establish that the gifts could be saved. A tacit reminder for charities to keep full records of their history of their organisations as they evolve.

Do check out the article by our colleague Andrew Mackie on the new rules regarding charity mergers also in May's Legacy Times.

Our experience of these matters

We have a lot of experience dealing with misdescribed and problematic legacies within wills. Thankfully very few end up being reported but sometimes a direction from the court is needed. Of course, this can mean significant costs have to be incurred and then there is the need to navigate how those costs should be dealt with and who should be responsible for them. We will update you on the cost outcome of this matter when it is appropriate to do so.

Sometimes it is appropriate to consider a non-contentious route to resolve issues over the construction of a will. It is possible for Personal Representatives to seek the opinion of a barrister with at least ten years' experience to provide their advice on the issue.

It is then possible to make an application under Section 48 of the Administration of Justice Act 1985 seeking the Court authority and approval for the Personal Representatives to act in accordance with the barrister's advice. In this instance, the Personal Representative is then protected from liability for mismanagement of the estate or breach of trust.

It is worth noting that such an application is dealt with on paper, so no hearing is required. As a result, the process under Section 48 has the potential to offer a quick and cost-effective route to dealing with such matters without having to make a full claim for interpretation of the Will pursuant to CPR part 64.

However, it should also be noted that Section 48 is not appropriate when a dispute arises. In this matter, a beneficiary under the intestacy rules sought to dispute that the gift to two charities should be saved and initially argued that they should fail and consequently a partial intestacy arose (in which case they would benefit). It would not therefore have been appropriate to the Personal Representative in this instance to use Section 48.

If you would like to discuss this case further or any specific issues relating to gifts left to your charity, please do not hesitate to contact the Foot Anstey Legacies Team and we would be happy to help.