Charitable bequests: Where there's a Will, there's a way

A large number of charitable organisations are reliant on bequests to enable them to carry out their charitable work and fulfil their charitable purposes. Charitable bequests have become increasingly popular in recent years and are now more important than ever for the survival of charities during and beyond the COVID-19 pandemic. However, when drafting a Will, it is essential to make sure the charity exists and is specified correctly.

Under Scots law, Wills typically include a clause which allows the executor to determine the recipient when the designation of the charity is unclear or where the charity has been amalgamated with another or changed its name etc. Inclusion of this clause would allow an executor to determine the intended bequest without the necessity to refer to the courts for clarification.

However, many Wills exist without reference to such a clause. In extreme cases, this can lead to the bequest falling so that no funds flow to any charity. In other cases, where it can be argued that the deceased had expressed at least a general charitable intention, executors may have the option to rely on judicial interpretation. This was demonstrated in the recent case of Knipe v British Racing Drivers’ Motor Sport Charity [2020] EWHC 3295 ((Ch)), where the courts had to intervene and determine how an ambiguous charitable bequest was to be interpreted.

The facts

In this case, the testator had referred to, firstly, the “British Racing Drivers’ Club Benevolent Fund” and, secondly, the “Cancer Research Fund” in their Will. However, neither of these institutions in fact existed. This meant that the executor of the Will was unable to proceed with the administration of the estate. This led to the executor seeking relief from the court for declarations of the proper construction of both clauses.

High Court Judgment

The Court held that the first bequest – which referred to British Racing Drivers’ Club Benevolent Fund – was relatively easy to interpret and the Court found that the first bequest was most likely intended for the British Racing Drivers’ Motor Sport Charity, which was a valid charitable organisation. This interpretation was based on the testator’s long-standing affiliation with the organisation and his 60-year career as a professional driver. As such, the Court found that it was unlikely that he was referring to any other charity when drafting his Will.

However, the second bequest – which referred to “Cancer Research Fund” – proved a little more problematic. The Court asserted that this phrase constituted a broad charitable purpose rather than any specific institution. Further, the Court found that the name was associated with a number of charities (there were four subsidiary charities with names affiliated with ‘Cancer Research Fund’ that existed at the time the Will was drafted) and there was no apparent evidence that the testator intended to leave money to any of these charities when he drafted his Will.

Consequently, it was held that the first bequest was to be gifted to the British Racing Drivers’ Motor Sport Charity, and the second was to be applied to the general fulfillment of the charitable purpose of cancer research.

What does this mean?

Essentially, this case demonstrates the courts’ willingness to rescue charitable legacies where possible and their intention to interpret mis-described charities in such a way as to ensure charitable bequests are determined as accurately as possible.

The case has also re-iterated the necessity to take extra care when drafting a Will to ensure that it has been clearly drafted. As it is not uncommon for there to be drafting errors when making charitable bequests, we have identified a few key points to consider:

  • Identify the beneficiaries accurately: always include the charity numbers and addresses in addition to the charities’ registered names (and any working name or acronym it may be more widely known as);
  • Bespoke wording: a lot of larger charities have their own bespoke wording which the public are encouraged to use when making gifts to them. Not all charities will have this, but it is very common for larger charities. The wording is normally available for use on the charity’s website or by contacting them directly;
  • Include a fail-safe clause: ensuring that the Will includes a clause which, when uncertainty arises, gives the executor discretion to determine the bequests without having to refer the Will to the courts for clarification. It is important to note that, in cases where a charity has been correctly defined (by its name, address and charity number) but has either ceased to exist or has morphed into another organization, the legacy will almost always fall if the Will does not contain a fail-safe clause as the courts would generally not consider that the original bequest constituted a general charitable intention;
  • Use clear language: over complicating a Will, or using unfocused language, can confuse the real intentions and result in the courts having to make determinations over the legacy, rather than the chosen executor;
  • Legacies for a specific purpose: most charitable bequests are made without specific instructions about their use. However, a testator may wish to specify how their chosen charity is to use the bequest, such as funding a particular project, making use of the monies in a particular country, or for research. If this is the intention, clear wording must be used to bind the charity to use the funds for the specified purpose; 
  • Consider a fallback bequest: it’s important to remember that a charity may exist at the time when the will was drafted, but may no longer exist when the estate is being administered. To avoid the complications this may bring, consider including a fallback bequest to another appropriate charity (a fail-safe clause would also achieve this aim, although it would then be the responsibility of the executors to select the recipient);
  • Explanation letter: choosing to partially or fully disinherit a child or spouse in favour of a chosen charity may result in unfavourable reactions and can even result in costly legal disputes. To avoid this, writing a letter to all beneficiaries explaining the reasons behind any decisions can often alleviate any confusion and help answer any questions they may have.
Avoiding pitfalls

To make sure these drafting pitfalls are avoided, always seek professional advice when drafting Wills. For advice or further information, please contact a member of our specialist Charities & Third Sector team or our Wills team.

This article was co-written by Sarah Milne, Trainee Solicitor.

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