Challenges to legacies left to charities

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The Amazon-only film Knives Out was a who-dunnit relating to the murder of a wealthy man who’d changed his Will to exclude his family, donating instead to what he thought was a good cause.

The legal firm Nelsons report that it is becoming increasingly common for testators to leave legacies to charities in their wills and since the coronavirus pandemic, more millennials are leaving money to charity according to a Yahoo Finance article.  This might be for inheritance tax planning reasons or a personal connection to a good cause, sometimes that money is left despite a general expectation that the testator leaves his or her estate to family members.

According to Nelsons, wealthy individuals will occasionally do this because they believe their children should make their own living.

Provisions for family

But such Wills can lead to disputes, and disappointed relatives may make claims against the estate using the Inheritance (Provisions for Family and Dependants) Act 1975.

When such a claim is made in a Will where a charity has been named as a beneficiary, charities are then part of the dispute. If a legacy is specific and limited, Nelsons advises the best course of action is to remain neutral as they may still receive the sum left to them. Neutrality can work out a lot less expensive because the charity doesn’t defend the claim.

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Risk of negative publicity

 

Pursuing a claim if the charity expects to receive less than promised is risky. It can also lead to bad PR, again something most charities will not want as it risks alienating potential donors.

If a charity seeks to settle a claim, this signals it supports an individual’s claim to an estate to an extent. Mediation is one of the ways to support this course of action.

Relatives can also question the validity of a Will, which can mean that any Will found to be invalid is not followed. The instructions in a previous Will are followed instead or the estate distributed according to intestacy laws.

This article is not intended as legal advice and should not be followed as such. Any charities facing challenges to legacy gifts should consult a legal professional.