How should a gift in a will to a charity that no longer exists be administered?
This often depends on the wording of the will. Guidance can also be gained from any notes made at the time of the making of the Will, for example by the solicitor who drew it up.
If you are the Executor the first option can be to look for a successor charity, i.e. one which has come about through the merger of the originally-named charity with another charity i.e. the merger of the Cancer Research Campaign and the Imperial Cancer Research Fund, now know as CRUK.
If you cannot find a successor charity then the legacy in the Will can still be saved for the purposes of charity.
In these circumstances it may be necessary to approach the Charity Commission to create a scheme which applies the legacy in accordance with what is known as the Cy-près Rule or doctrine. This effectively means that you are seeking to transfer the gift to a charity which is “as near as possible” to the original charity i.e with similar aims.
If a gift is not held in trust (and whether a gift is held in trust is normally expressed within the gift itself) then Executors must make an application to the Attorney General’s Office for direction under what is known as the “Royal Sign Manual”.
The Royal Sign Manual literally means the signature of the Monarch. An application to the Attorney General under this procedure is only made where the identity of a charitable beneficiary becomes uncertain. In that way it is very similar to the Charity Commission’s powers to apply gifts to similar charities as those named in the Will.
If a charity has ceased to exist because it has gone into liquidation, and if the gift is not held in trust, then it is payable to the liquidator of the charity and has to be made available to creditors. This is because, to all intents and purposes, a charity which has been run as an incorporated company is governed by the same insolvency rules as other companies.
It is imperative that before embarking on any particular course of action and certainly before distributing any funds, the Executor(s) should seek full legal advice.
Our specialist Probate Team has experience of dealing with estates where gifts have been left to charities that no longer exist. Please contact James Trescothick-Martin for an initial confidential chat.
Image by Howard Lake under a Creative Commons Licence