Charitable legacies are a vital source of income for many organisations, often forming a significant part of their funding. For a charity named as a residuary beneficiary to a Will, claims against the estate can therefore create delay and uncertainty.

While certain claims against estates may be well-founded and deserving of careful consideration, it is not uncommon for charities to encounter speculative claims that are poorly particularised and lack evidential support. Some claimants may even go so far as to propose settlement terms or mediation, before formally setting out their claim.

It is important to remember that no meaningful assessment of a claim can be undertaken until sufficient information has been gathered to understand the basis of the claim being made. Charities are under a duty to safeguard charitable assets, including gifts left as legacies, and cannot simply agree to a settlement proposal without proper evaluation.

If your charity has received notice of a potential claim against an estate in which it is a beneficiary, it is always wise to seek legal advice. There are a few key points which are worth considering in particular to know whether the claim is a genuine cause for concern:

  1. Has the claimant specified what claim they are bringing? Often a claimant will have only provided vague allusions to challenging a Will and will not even have gone as far as to specify the basis on which the challenge is made. For example, is their claim that the Will should be set aside on the basis that the testator lacked testamentary capacity? Alternatively, are they wishing to bring a claim under the 1975 Act on the basis that the Will fails to make ‘reasonable financial provision’ for them? Some claimants may even seek to incorporate as many different claims as possible in the hope that one might stick, despite none of them being properly made out.
  2. Even if the claimant has outlined the type of challenge(s) they are seeking to bring, have they provided a pre-action protocol compliant letter before action? This letter should set out all the evidence the claimant is seeking to rely on and the full basis of their claim.
  3. If the claim relates to mental capacity, have the testator’s medical records been obtained? A proper assessment of testamentary capacity relies heavily on objective medical evidence, typically found in the testator’s health records.
  4. If the claimant is seeking maintenance under the 1975 Act, have they provided full evidence of their financial position, including their assets, income and expenditure? Does the evidence provided show real financial need or a luxury lifestyle which the claimant is seeking to maintain at the expense of the estate?
  5. Has a Larke v Nugus request been made to the administrators of the estate? Obtaining additional evidence of the circumstances under which a Will was drafted can provide essential insight into the merits of a claim.
  6. Is the estate administration continuing to be progressed? Whether or not a claim is brought, it is always desirable for the administration of the estate to be progressed to ensure assets are preserved or sold at the best price and no further liabilities are incurred unnecessarily. Should a claimant seek to challenge this, a possible solution may be for the estate to be administered but no distributions made until the dispute has been resolved.

We understand that receiving notice of a claim against an estate in which your charity is a beneficiary can be unsettling, and we are always here to support you. The steps outlined above can help clarify the strength of a claim initially and provide a useful reality-check as to whether there is any real cause for concern.

If you have any questions on the points raised in the article, please contact Leticia Jennings, Clara Hutter or Stanley Carrodus.

The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further information.