Legacy disputes

30 May, 2012

Legacies left to charities in Wills represent for many of them a vital stream of income.  This is particularly so in the current economic climate, where other sources of income are becoming increasingly difficult to maintain.


However, charities are increasingly finding that these legacies are being challenged by the deceased’s family. This normally occurs through a claim against the validity of the Will under which the charity benefits, by a relative or dependant bringing a claim for a share of the Estate under the Inheritance (Provision for Family and Dependants) Act 1975 or by someone asserting a claim against the Estate based on the doctrine of estoppel.


There have been a number of high profile challenges made to Wills benefiting charities over the last few years and in many of these the charity has lost, resulting in financial loss and, just as importantly, negative publicity.


Does this mean that charities should give up their legacies as soon as any claim is made by the family? No, it does not. With advice from experienced professionals, it is possible to defend a challenge whilst looking to protect the wider interests of the charity.


The first concern is costs and this means not just the legal costs that a charity will have to pay for their legal advice but also the prospect of having to pay costs to the other side.


However, through the use of alternative funding options and insurance, it is possible for a charity to respond robustly to a challenge made to a legacy without exposing itself to the full costs risks associated with litigation.


In relation to concerns about adverse publicity, charities should be aware that most cases can be and are settled by agreement well before trial. Under the rules that govern legal claims, parties are expected to try and resolve disputes in this manner and this is increasingly done at mediation.


Reviewed in 2015