Insight

Legacy loop: spring edition 2021

Published: 5th March 2021
Area: For the individual

Welcome to the spring edition of our Legacy Loop

Recent case update | Charities
Knipe v The British Racing Drivers’ Motor Sport Charity and Ors (2020) EWHC 3295 (Ch)
Background to the case

The recent case of Knipe involves two charities that were named in the testator’s will (‘the British Drivers Club Benevolent Fund’ and ‘the Cancer Research fund’) - neither of which actually existed at the time of his death.

Ordinarily, when trying to work out who should benefit from a will, the will file and evidence from the solicitors who prepared the will can provide useful guidance.  Unfortunately, in Knipe, the executor was unable to get any clarification on what the testator had intended from the firm who had made the will as the will file had been destroyed.

An application was then made to the court for determination as to the correct construction of the will in relation to these two charitable gifts.

The court considered the testator’s professional background and his previous longstanding involvement with and membership with the British Racing Drivers’ Motor Sports Charity, it was concluded that the testator must have intended them to benefit, as they are the only named registered charity with a similar name and which has a benevolent fund administered by the British Racing Drivers’ Club (a non-charitable unincorporated association).

What was the outcome?

The court was unable to establish a link between the testator and any particular cancer research charity, and it was considered that the testator did not have any strong connections to a particular cancer charity. It was therefore interpreted that the testator generally intended to benefit any general cancer research charity and the court authorised the executor to pay the legacy to a cancer research charity of his choice.

What does the outcome of this case mean for charities?

Whilst it is possible for the court to interpret and determine a testator’s intentions following death, it is both quicker and significantly less costly to ensure that all beneficiaries are accurately identified and named at the time of making the will.

Particularly in the case of charity beneficiaries, inclusion of the charity’s full registered name, address and company/charity number in the will itself means that the right beneficiaries can be easily identified when it comes to administering an estate, especially if the charity then merges or its assets passed to another charity.

The full version of the judgment, in this case, can be found here.

The future of will-making and legacy donations and the implications for charity fundraisers and managers

Legacy Foresight’s recent Charitable Wills in the 21st Century project looked at will-making and charitable legacies, both now and into the future, considering the implications for both legacy fundraisers and managers.

The report recognises that people’s circumstances, relationships and wishes change over time, and this often elicits a person to change a will that they may have done some years earlier later in life. This may therefore play a part in influencing where the focus should be in terms of stewardship and awareness-raising from legacy teams.

Online wills

Whilst we are seeing a significant shift in law firms moving further to remote working and provision of services, and introduction of video witnessing of wills, it is not considered likely that there will be a huge overhaul of the current legislation governing will making.  Wills are important documents that determine who benefits from your estate following your death, it is therefore essential that proper advice is sought and consideration is given to the content and execution of that document (as would be the case with giving away money and assets during lifetime).

Read our recent article on the video witnessing of wills and the possible impact of the potential introduction of dispensing powers (upholding testamentary wishes made do not comply with the formal requirements of a will).

The Legacy Foresight report suggests that rather than a “revolution” in the way wills are made, there is more likely to be an “evolution” by way of voluntary codes of conduct and more explicit standards brought in. Therefore, whilst online wills may provide a more accessible route to making a will, there is a danger that we could see a knock on effect later, perhaps due to fewer safeguards in place to ensure those wills are validly made and executed.

Our recent webinar, hosted by STEP East Midlands, considered the common problems of ‘DIY wills’, as well as taking a look at digital assets. View a recording of the webinar.

Free wills

Charity schemes and free wills services are found to be a significant source of business within the will-making sector, and search and comparison providers such as Money Saving Expert, Which and Citizens Advice (and even social media) are likely to be important in influencing the schemes potential donors are exposed to.

Whereas charitable wills among the ‘war babies’ and ‘baby boomers’ are perhaps more prevalent than among millennials, free wills schemes are appearing to appeal to young people where the cost of making a will may be a significant factor. The report highlights therefore that, as the payback of those schemes is generally far off in relation to young people, stewardship and maintaining relations with those donors is vital in retaining their support.

How will charities be affected?

The project suggests that it remains uncertain exactly what the effect on charitable giving will be following the coronavirus pandemic, and whether there will be any notable changes to the will-making industry or donors’ needs. The report suggests that a further phase is intended to be carried out in the wake of the coronavirus crisis to explore these questions in more detail.

We’re here to help

Read our full spring legacy loop email here.

Many members of our team are trustees of charities themselves and have first-hand experience of the challenges facing charities today. We also know that legacy donations form an increasingly large part of a charity’s income. If you have a dispute around a legacy donation then we can help – contact Andrew Wilkinson or Debra Burton for support.

As well as having broad expertise in charity law, our dedicated charity team can support charities with issues such as employment law, funding and corporate advice, intellectual property considerations and real estate advice.

Our charities team is ranked as Top Tier firm in the Legal 500 2021 edition.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND. 

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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