“It’s always helpful to have gifts in wills”, the National Trust states. “Simply tell us what your wishes are. We’ll be pleased to honour them.”
Charities throughout the UK make similar pledges, resulting in a consistent annual income of around £2bn a year over the last decade. Yet a recent spate of contentious cases is causing concern as to how such donations are used and how securely they are protected.
Legal contest
“For charities like the RNLI and RSPCA, legacy incomes are a fundamental part of their annual income [but] it is undoubtedly the case that there are more challenges being made,” says Jonathan Burchfield, a charity law specialist at the UK legal practice Stone King.
The most common reason for contested wills that involve legacies is the perceived failure of the donor to make what the Inheritance Act 1975 calls “reasonable financial provision” for their offspring or dependents. The High Court recently upheld a case brought by 54-year-old Heather Iloit who objected to her mother (from whom she was estranged) leaving her estate to three animal charities.
Legacies can lead to legal hot water for other reasons too. The wildlife charity RSPB, for instance, has found itself at the centre of a row after considering selling off an eight-hectare plot in Cheshire that was left as a bequest. The donor asked that the land, which is now reportedly worth up to £6m, never be built on.
Chris Millward, chief executive at the Institute of Legacy Management, insists that, while neither case sets a legal precedent, charities have much to learn from both.
Unlike other forms of fundraising, legacy administration has no formal code of practice. Some smaller charities in particular may not have qualified resources or standard operating procedures in place, Millward adds: “There isn’t unprofessionalism within the sector as such, but I think there’s always opportunity to establish what best practice might look like.”
Family first, lawyers second
First on his list would be to give precedence to family and friends. “We’d always say that … if there were room left for charity, then that would be very much appreciated,” Millward says. The Remember a Charity campaign, which represents over 140 non-profit organisations, pushes the same line.
Second would be to encourage donors to contact an independent solicitor. Wills that are professionally written and up to date are far less likely to face contestation in the courts.
Thirdly, charities should do their best to avoid making binding commitments linked to legacies. Far better is to express the purpose of a legacy as a “wish” or “desire”, thus leaving the charity with flexibility should their goals or circumstances change in the future.
This last point may prove harder than it seems. The era of givers who trust charities to act on their behalf is dying out, Millward concedes. Younger donors demand greater transparency and want a more direct say in how their bequests are used.
“For some donors, the desire to link it [a legacy] more specifically to a particular area or theme of work is very, very strong and one that’s rising … Charities are going to have to respond to that,” he states.
One option is for fundraisers to encourage donors who are considering leaving a legacy to discuss their intentions directly with the respective charity. Many don’t, often because they fear being hassled for other fundraising requests.
Without such a prior conversation, however, charities are often left to guess the donor’s original intentions. Establishing previous contact also evidences a relationship between the legacy maker and the recipient charity, a factor that swayed the judgement in the Ilott case cited above.
Cy près doctrine
In cases where a specific restriction has been placed on a bequest and a charity cannot meet that request, then an application can be made to the Court of the Charity Commissions for relief under the “cy-près” doctrine – meaning “near to”. The principle might kick in, say, in the case of a medical charity left money to research a particular disease for which, in the intervening years, a cure has been found.
The cy-près doctrine has its flaws, however. It cannot assist when a charity no longer exists, for example, nor where a general charitable intent cannot be shown.
Charities have to “walk a tightrope” between engaging with donors to clarify their intentions and being perceived as influencing their decision to leave it something, says Gaynor Jackson, a partner at UK law firm Ward Hadaway. The latter should be avoided at all costs, she states. If a donor mentions they have family, meanwhile, she strongly advises the charity to tell them to ensure their intentions and reasons are properly recorded.
Even then, donors cannot obtain a cast-iron guarantee that their legacy wishes will not be overturned by contending claims. As Jackson states: “Unfortunately, the testator’s wishes and reasons for leaving their assets as they want is only a small part of what the court takes into consideration.”
