Since the last edition of Legacies Roundup, BWB’s Charity Legacies, Trusts & Probate Disputes team has been working on some interesting new cases, including a dispute over the poor administration of a charitable trust, and defending claims to various charity legacies brought under the Inheritance (Provision for Family and Dependants) Act 1975.
In this edition of Legacies Roundup we take a look at the benefits of professionally drafted wills which include gifts to charity, and the role solicitors have to play in encouraging legacy fundraising. We also examine the latest legacy figures from Legacy Foresight, along with commentary on the likely effect the new Fundraising Preference Service will have on legacy fundraising. We finish by looking forward to our 2017 legacy events programme, to which you are all invited.
If you have colleagues who would like to receive our regular round up, or updates on other related areas, please click here.
Are professionally drafted wills always the best bet?
A recent survey by Will Aid shows that the public still consider solicitors to be the best option when drafting wills, ahead of online or do-it-yourself resources or will writers.
You might not be hugely surprised to learn that we support those findings. However, we have seen a rise in the number of cases where issues have arisen because of an error caused by a solicitor when drafting a will. Whilst in the majority of cases wills that are drafted by solicitors are done so in accordance with the testator’s true intentions, using a solicitor will not always guarantee a problem free will. As such, charities should be alive to the risk of mistakes cropping up in wills even where solicitors have been involved in the drafting process.
A high profile example is the case of Marley v Rawlings, where the solicitor who prepared the wills for Mr and Mrs Rawlings gave each of them the wrong will to sign which meant that the last will was invalid and was only saved by rectification by the Supreme Court. More recently we have been assisting a charity which is a residuary beneficiary under a will who could have been deprived of a significant sum due to the solicitor’s failure to give effect to the testator’s instructions, despite an unequivocal note on the solicitor’s file about those instructions.
These cases serve as a useful reminder that charities should not be afraid to look further if there is any doubt about the testator’s wishes and to ask questions of the executors and of the solicitor who drafted the will.
Even where solicitors may have got it wrong, there may well be remedies available to your charity which would minimise or negate any loss that would otherwise be suffered as a result of a drafting error. A solicitor drafting a will has a duty of care to both their client (i.e. the donor / testator), but also to those who benefit (or should benefit!) under the will. In practice this means an intended beneficiary may have a claim in professional negligence against the solicitor, under which it can recover any losses it suffers as result of the solicitor’s negligence, including any legal costs. Alternatively the intended beneficiary could apply to Court for rectification of the will (i.e. to have it amended to reflect the testator’s true intentions), all at the solicitor’s expense. And importantly, because solicitors are regulated (unlike will writers) they are required by law to be underwritten by professional indemnity insurance to cover such claims.
Of course, the discovery of an error in the will or administration of the estate doesn’t automatically mean contested court proceedings will become necessary. We routinely resolve complex issues without needing to go to Court: for example through negotiating with the parties to agree the terms of a deed of variation which in practice will vary the will so as to ensure the charity receives the gift the testator intended them to receive.
Despite the risk of a problem arising, in our experience a will drafted by a solicitor is more likely to meet the legal requirements of a valid will, and ensure that the donor’s assets go to whom they wish. This means getting the basics right: for example, including in the will the charity’s full legal name, its registered charity number and registered address.
Recent research by Remember a Charity indicates that whether or not a person leaves a gift to charity in their will at all can be greatly influenced by a solicitor raising the topic with them at the will-writing stage, and that even the language the solicitor uses when discussing matters with their client can have a positive impact.
The relationship charities have with solicitors will continue to be ever more important, and it is an area that the Institute of Legacy Management is looking at as it consults with its members on good practice guidance for legacy administration. The draft guidance highlights the importance for charities to build and maintain good working relationships with solicitors, including when acting as or for executors in an estate administration.
So although mistakes will and do arise, and whilst there may be situations where the cheaper do-it yourself-type options can be viable alternatives, if your charity is approached by a donor who wishes to leave a gift to your charity in their will, best practice remains recommending that the donor seeks the services of a solicitor.
Good news from Legacy Foresight
Figures published by Legacy Foresight in September show that the average cash gift left to charity rose to a new high of £4,120. This is the third consecutive quarterly increase, and although the quarter also saw average residual values fall slightly (from £60,300 in the year to June to £58,500 in the year to September), Legacy Foresight considers this to be an adjustment to a record high seen in June rather than a weakening of residual values.
A steady rise over the last four years in the number of residual notifications was also reported, with the share of total notifications for residual gifts now making up 40%.
Meg Abdy of Legacy Foresight, speaking at the Institute of Fundraising conference last month, also reported that the new Fundraising Preference Service, by which individuals will be able to block all communications from named charities (which is likely to be up and running by Spring/Summer 2017) is likely to only have a 'minimal effect' on charitable legacies: whilst the FPS, along with changes in Data Protection regulations, are likely to have a big impact on other forms of charity fundraising, Legacy Foresight is predicting a reduction in charity legacies of just 0.4 percent over the next 10 years.
Other factors (such as a possible effect on house prices following the EU Referendum result) will no doubt cause this to remain a hot topic for the sector, and we will continue to keep our readers updated with developments.
We were pleased to welcome so many of you to our programme of legacy events throughout 2016, and we are already busy planning an exciting programme for 2017, the first of which will have an international flavour with guests speakers from Scotland and Northern Ireland discussing jurisdictional issues related to legacies. These events are always very popular, and as we can only offer limited spaces please do look out for details when they are published.
Posted on 14/12/2016 in Legal UpdatesBack to Knowledge