Leticia Jennings, partner, reviews a recent dispute regarding misnamed charities in an ambiguous will. What are the lessons learned and what should you do if your charity is contacted?
This article by Leticia Jennings was featured in the March 2021 issue of Charity Finance following a High Court judgment concerning an ambiguous will in which some of the named charitable organisations appeared to be non-existent.
Barrie Williams died on 8 September 2018. He left a sizeable net estate worth £1,150,205 for probate purposes. By his last will dated 26 February 2004, Mr Williams left various legacies including gifts of property and cash and distributed his residuary estate as follows:-
- 50% to “the British Racing Drivers Club Benevolent Fund”;
- 30% to “the British Racing Drivers Club absolutely, but with the request that the monies be held as the ‘Barrie Williams scholarship fund’ and used at the discretion of the club to provide for an annual scholarship for the training of young racing drivers”;
- 10% to “the Royal Society for the Prevention of Cruelty to Animals”; and
- 10% to “the Cancer Research Fund”.
The executor issued proceedings for a court determination of certain questions and issues. In particular he sought construction of the will pertaining to the gifts left to “the British Racing Drivers Club Benevolent Fund” and “the Cancer Research Fund”, as no such organisations existed.
The application was not contested by the defendants and the executor sought summary judgment (i.e. a determination of the matter without a full blown trial). The judge agreed to deal with the matter on the paper and without a hearing in the interest of saving costs.
On the key issues the judge ruled as follows:-
- The 50% share of the residuary estate left to the non-existent British Racing Drivers Club Benevolent Fund was to be construed as a gift to the British Racing Drivers’ Club Motor Sport Charity, a registered charity that operates as a benevolent fund for benefit of members of the British Racing Drivers’ Club and other people involved in the sport in times of need. The judge found that the British Racing Drivers’ Club Motor Sport Charity was the organisation that most closely fit the description of the non-existent entity named in the will and held that the will would be construed accordingly.
- The 10% share of the residuary estate left to the non-existent “Cancer Research Fund” was to be construed as a gift to the charitable purpose of funding research into cancer. There are of course several charities that have names similar to “Cancer Research Fund”, or purposes that would fit the description stated in the will, but there is no charity with the exact name and no single charity with a similar name or purpose. It is open to the court to find that such gifts are not for a particular organisation but are instead for a particular charitable purpose – in this case the funding of cancer research. Where gifts are so-called purpose gifts it is for the executor to decide how to apply the gift to further those purposes. In this case the judge agreed that the executor was entitled to split the gift between two cancer research charities as they had the charitable purpose stated in the will.
The judge also agreed that the executor was entitled to his costs out of the estate.
Lessons to take away
It is of course positive news for charities that the judge was willing to deal with this matter pragmatically, resulting in three charities receiving sizeable gifts that might otherwise have failed. It is also positive that the judge was willing to deal with the case promptly (by way of a summary judgment application) and cost effectively by dealing with the matter on the paper and without a hearing. But the fact that this case had to come before a judge at all is to be regretted, not least because of the costs it incurred both for the executor (whose costs came out of the estate thus reducing the gifts to charity) and the charities themselves who will have incurred costs and management time dealing with the matter.
Construction cases usually arise because of issues of drafting: for example, the identity of assets or beneficiaries might be ambiguous making it difficult for an executor to know what to distribute or who to distribute it to. This is crucial, because if an executor distributes to an incorrect beneficiary they may face a breach of trust claim and personal liability. There is also the risk that the testator’s wishes will not be adhered to simply because the will is unclear. Unfortunately, both these issues arose in this case.
The issues (and the entire case) could have easily been avoided had the will been clearer as to the identity of beneficiaries, for example by naming the British Racing Drivers’ Club Motor Sport Charity and by either naming a specific cancer research charity or making it clear that the gift was for the purpose of funding cancer research thus giving the executor (some) discretion as to the recipient. That would have avoided the need for an application and the associated costs. Unfortunately, as in this case, it is not enough for relevant parties to consent to the application: because of the potential exposure facing the executor caused by the ambiguities in the will it was necessary to ask the court for a determination.
Of course, it is difficult for charities to influence matters because often they do not know about gifts until the testator has died. But if your charity is contacted (for example, testators sometimes contact charities to ask for advice about leaving a gift to charity) it is best practice to provide the person with your charity’s full legal name and registered charity number and also to recommend that they have their will drawn up by a private client solicitor. If you find out about the matter post death, you can still work to reduce costs and speed matters up by acting promptly and pragmatically to assist the executor and the court to resolve the matter, as the charities did in this case.