Charities | Vanishing act

A familiar complexity of probate is the difficulty that arises when a gift is made to a charity which has ceased to exist, or which seems never to have existed at all (or, at least, not under the name used by the testator).

Ideally, of course, this difficulty would have been averted when the will was drafted. The Charity Commission advises that the charity's name should be checked and, if it is registered with the commission, that its number should be quoted in the will. The commission also suggests that the testator might consider informing the charity of the gift and asking to be informed if the charity is going to wind up or merge with another charity. Another option is to make a gift-over to any charity with the same purpose in the event that the named charity ceases to exist or cannot be traced.

But if none of these options has been adopted, and no charity can be found to match the charity identified in the will, is it always necessary for the executors to ask the commission to intervene? Not according to the commission in its guidance.

The guidance explains that the commission has no jurisdiction author-itatively to interpret the provisions of a will, nor to adjudicate on disputed claims to property between charities and next-of-kin. Moreover, making comfort orders which are strictly unnecessary is a poor use of its limited resources. The commission identifies three instances where executors may properly rely on their own judgement (subject to the usual precaution of considering the views of all potential claimants), rather than seek the comfort (such as it is) of an order from the commission

The first type of case is where the charity seems to have been misdescribed in the will. The commission says that it is the executors' responsibility to identify the intended charity recipient and suggests questions that the executors might address, such as whether the testator had any connection with particular charities during his lifetime, or whether potential recipients are, or have been, known by other names. Once the executors have identified the charity that the testator seems to have intended to benefit, they may pay over the gift without seeking the commission's approval. (Nor do they need the commission's approval to negotiate a compromise to meet competing claims to be the intended recipient).

In the second type of case, the charity named in the will cannot be identified, or else ceased to exist before the testator's death, but the gift can be treated as having been made for a charitable purpose, rather than to a particular charity. The commission explains that, where a gift has been made to an unincorporated institution which has ceased to exist, the court has sometimes been able to save the gift by construing it as being for the charitable purpose of the institution, rather than to the institution itself. In cases of this kind, it may be open to the executors to identify another charity carrying on the purpose of the named charity and to pay over the gift to it.

The third type of case arises where the charity named in the will ceases to exist after the death of the testator. The gift becomes part of the named charity's property on the death of the testator and the commission takes the view that, in most cases, its intervention will not be required where there is a successor body to the named charity, or where the named charity's assets have been transferred to another charity. These cases will usually involve incorporation or some form of merger.