Charity begins with your lawyer

10 March, 2011

Two recent court cases have shone a spotlight on gifts to charities by will. Charities have proved to be tenacious in pursuing these legacies, often at great cost. The importance of getting your will right can never be overstated, but here is a stark reminder of why.

As the “Big Society” shifts greater responsibility to volunteer organisations it is perhaps not surprising to see charities fighting for all they can get. Two recent court cases involving wills have shown just how far this can go.

The cases in question are Gill v Woodall, and RSPCA v Sharp. One (Sharp) involved an ambiguous will borne of some poor drafting. The other (Woodall), a will that although clear in its terms was not thought to properly reflect the testator’s wishes. Both cases reached the Court of Appeal at significant expense (in Woodall upwards of a staggering £1.3m).

It must be said that charities are duty bound to collect and maximise what is given to them whether by will or otherwise.  In the vast majority of cases this is straightforward and uncontroversial.  The family and executors are happy to see the charitable wishes of the testator carried out and perhaps even to enjoy a little reflected benevolence.

But problems arise when the will is not clear.  In those cases charities will take their duties very seriously, if appropriate, going to court to contest a will. That is what happened in both these cases.

In Sharp the charity lost the case, and the judge ordered them to pay all the costs of both parties.  The charity felt, not unreasonably as it turned out, pretty hard done by, and appealed successfully.  Not only were they awarded a greater share of the estate, but were relieved of having to bear all the costs – they were to be met from the estate itself.  That obviously was a disappointing result for the family and friends who lost out, but with better advice all round (including to the testator himself) much of the pain could have been avoided.

Surely charities can’t have carte blanche to fight on regardless? Well thankfully no. Contesting a will is expensive and although duty bound to pursue disputed cases, there comes a point where the costs are disproportionate to the claim and commercial considerations have to come into play.  But where often it is the estate that meets the costs, a beneficiary (charitable or other) who will otherwise get nothing, would appear to have nothing to lose.

Fortunately Woodall has thrown something of a bucket of cold water on that idea.

Woodall was an extreme case. A couple made almost identical wills. They left everything to each other but on the second death a valuable farm to the Charity.  The husband was domineering and liked the Charity, the wife fragile and didn’t.  Husband died first and wife left her will unchanged.  The will specified that daughter receive nothing.  Things looked good for the Charity.

However the daughter believed her father had forced her mother into making the will in these terms, and that her mother couldn’t have known and properly approved of these terms. She was helped by there being no evidence that the mother had met with the solicitors to give instructions for the will in the first place, and the repeated promises by her mother that she would inherit the farm.  This led the daughter to contest the will.

The Charity, relying on the clear wording of the will, were confident they would win, and as a result did little to try and settle the case before court. The Charity actually lost the case and the subsequent appeal. The Court felt the Charity had failed to properly mediate and so ordered the Charity to pay most of the £1.3m costs, and it seems likely the appeal costs as well.

Tempting (even cathartic) as it may be to rail against the apparently aggressive and deep pocketed charities concerned it is perhaps less attractive to consider the truth – which is that the mess could well be the making of the testatrix and possibly even her (not particularly good) lawyer. And rather even than debate that, it must be better for everyone to get the will right in the first place.

Whether or not you wish to include charities in your will, there is always potential for a badly drafted document to lead to court. In one of the leading texts on wills, the list of names of cited cases runs to almost 200 pages and spans at least 3 centuries. Those are all good law and most will have been to the Court of Appeal or above. Add to that the multiples of that which are not reported and you begin to get an idea of the scale of the problem.

It really does pay to get it right at the beginning and particularly where you have beneficiaries with duties to pursue as opposed to a simple desire for a piece of the action – or worse to “seek out the truth” (whatever that might be).

So what can be learned from this rather expensive lesson?

Charities can’t simply pursue at all costs.  Commercial considerations are important too, to say nothing of Charities’ other duty – to avoid acting in a way that could jeopardise their reputation.

And for testators?  Find a good lawyer.  Curious as it may seem, your biggest act of charity might turn out to be writing him a cheque.