Kate Johnson’s article of 26 August provided an interesting insight into the view of charity legacy teams held by some probate practitioners. Indeed, when I left private practice to join the third sector eighteen months ago, a few colleagues were horrified.
Tensions clearly exist between some parties on either side of the estate administration process. To suggest that clients make charitable gifts in their wills through discretionary trusts to prevent their executors from needing to account to charitable beneficiaries is, however, concerning.
Probate practitioners hold a wide range of knowledge to administer an estate. Few also become experts in the inner workings of charities and charity law. A charity requesting documents is not an act of distrust; they are required to be audited and these documents are requested by auditors. One would hope that many of the same documents are provided to individual legatees. Where a charity is left a legacy in the Will of a deceased, rules dictate that this becomes part of their accrued income and forms the basis for funding decisions in respect of the charity’s objectives – presumably the same objectives that resonated with the deceased.
I accept Kate Johnson’s statement that charities may be less flexible than other beneficiaries; one sees this with requests for ex-gratia payments. This is because, as the legacy has been accrued, there are strict rules against putting a charity’s money towards a cause that is not one of its charitable objectives. To suggest that a charity is ‘unwilling’ to be flexible is incorrect, as often their hands are tied.
Through collaboration with an executor, the value that a good legacy officer can add to a legacy is enormous: potential overages can be spotted, tax can be saved, and the deceased’s wishes can be represented where a will is being contested. These are just some examples. By putting charitable legacies into discretionary trusts these opportunities, opportunities which serve to protect and grow a legator’s gift, would be missed.
For some charities, legacies can account for nearly half of their income. By remembering a charity in their Will, a testator is supporting a cause. Hearing about the people behind the legacies and the reason for their support adds a richness to the work that we do. To suggest that this support be curtailed or controlled by another besides the testator seems wrong if the primary motivation for this is to avoid having to account to the legator’s chosen beneficiaries.
Furthermore, for the many estates that are administered by lay executors, discretionary trusts add another layer of complexities, additional onuses and provide greater stress at, possibly, one of the most difficult periods of their lives. For professionals, these additional layers are likely to result in higher, often justifiable but nonetheless unchallengeable, fees which will ultimately reflect badly on our profession.
Most relationships that we build with those administering a deceased’s estate are positive and collaborative. Whilst I disagree with Kate Johnson’s position, I am grateful to her for opening a much-needed dialogue.
Kate Vowden is Legacy Manager at the British Heart Foundation and former Private Client Solicitor
