Charitable Gifts in Wills

Many people look to make provision in their Wills for Charity, for a variety of reasons. Some may wish to benefit a Charity close to their heart, some may have made regular gifts during their lifetime to a specific Charity or Charities, others may not have anyone else to leave their Estate to and so would prefer for it to go to Charity rather than to the Crown, and some may look to achieve the Inheritance Tax benefits of gifting at least 10% of their Estate to Charity.

As a result, legacies in Wills to Charity is a huge sector, and can account for a substantial amount of a Charity’s income. For this reason, many Charities employ teams of legacy managers, not only to encourage individuals to leave gifts in their Wills to Charity (campaigns such as the “Free Wills Month” are part of this), but also to ensure that any such legacies are received upon a person’s death.

In a recent High Court case, Dryden v Young & Others (2024), there was some clarification as to how the Courts approach cases where the intended Charitable Beneficiary is perhaps unclear, whether due to their name being misspelt, or there either being an incorrect address or no address, or if there have been any changes to the Charity over the years.

The background of the matter was that Marjorie Thompson had died in April 2020, leaving a Will made in May 2016. Under the terms of the Will, Mrs Thompson had divided her Estate equally between fifteen (15) organisations. Of them, there were question marks about seven (7) beneficiaries.

For example, one (1) of the Beneficiaries was described as “Animal Defence Society 52 – 53 Dean Street London W1V 5HJ”. However, there is no registered Charity with the name “Animal Defence Society”, certainly at the date of death, nor was there at the date of the Will being made.

However, the Court were referred to “The Animal Defence Trust”, which is a registered Charity and was founded in September 1971 by way of a Declaration of Trust made between “The Animal Defence Society Limited” of 52/53 Dean Street, London W1 and seven (7) individual Trustees.

The questions the Court therefore had to answer was (i) whether the gift in the Will failed, and / or (ii) who the gift could be paid to, or whether it passed under the Rules of Intestacy to Mrs Thompson’s relatives.

In answering this question, the Court had to consider how Wills are to be interpreted and the complicated rules relating to Charitable Gifts.

More particularly:

(i) First, the Court needs to interpret the wording used to identify the recipient. If the gift is to an apparent Charity, it is necessary to see if the gift is to an entity which existed at the date of the Will and what sort of entity it is.

(ii) If there is no such entity or it is unclear which entity is meant, then the next question is whether the gift can be considered a general gift for charitable purposes, in which case the principles of Cy-Pres will be applied.

(iii) Second, if a specific entity can be identified as the recipient, the starting positions are that:

(a) if it is a gift to a charitable trust or a charitable unincorporated association, it will be treated as a gift for the charitable purposes for which the charity operates, rather than as a gift to a specific charity or which is dependant upon the continued existence of the particular entity, subject to any contrary intention in the Will;

(b) if it is a gift to an incorporated charity, it will be treated as a gift to the corporate entity itself, subject to any contrary intention in the Will.

(iv) Third, the effect of those starting positions is best seen in action. Accordingly:

• where a charitable trust or a charitable unincorporated association has ceased to exist in the lifetime of the Donor and there is now no entity carrying on its purposes, or it has changed its charitable purposes / its charitable purposes are now carried on by a new entity, the gift will be valid and either applied pursuant to the principles of Cy-Pres or paid to the amended / new entity.

• where an incorporated charity has altered its status (i.e. such as going into liquidation) or altered its purposes, the gift will remain valid.

• where an incorporated charity has ceased to exist in the lifetime of the Donor, the gift will fail.

(iv) Fourth, if the gift is to an entity which never existed or if the gift fails for one of the other reasons mentioned above, provided a general charitable intent can be taken from the words used in the Will, then the principles of Cy-Pres will be applied.

Briefly, the principles of Cy-Pres are that, where there has been a failure of a charitable gift, the Charity Commission or the Court can direct that the funds in question can be applied to other, closely related, charitable purposes.

Decision

After considering the legal position in detail, the Court decided that all seven (7) of the gifts in question were valid, and didn’t fail or pass to Mrs Thompson’s relatives.

That is primarily due to the wording that was used in the Will, and the application of the above-mentioned rules and principles. However, it also reflects the desire of the Court, as far as possible, to give effect to gifts in Wills which were clearly made for Charitable purposes, even if the drafting left quite a lot to be desired.

How can we help?

If you are involved in or dealing with an Estate where there is a Will which is in any way unclear, or there is a dispute regarding how a Trust is to be distributed, particularly where Charitable Beneficiaries are involved (or you may be a Charity Trustee), then please contact us. Our Contentious Trusts & Probate Team are here for you on 01823 625824.

We handle a variety of disputes and issues surrounding Deceased’s Estates and Trusts. Further, we can offer high quality, cost-effective legal advice on such matters.