Charities as Beneficiaries of Wills

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A recent decision of the Supreme Court of NSW highlights the need for charities, even those long established and credible, to have prudent measures in place to guard their credibility and reputation when supporters or those in their care, especially the frail and elderly, indicate an intention to benefit the charity in their Will.

The case – Dickman v Holley; Estate of Simpson [2013] NSWSC 18  – involved a disappointed beneficiary under a recent previous will who succeeded in having the gift to the charity overturned and was awarded costs against the charity even after the passing of some time. In our experience more disappointed beneficiaries, whether family or not (the successful disappointed beneficiary was not a relative of the deceased in this case) are prepared to contest a charitable gift or bequest.

Merely having a “bequest clause” is not enough.

A charity should maintain a scrupulous and appropriately distant relationship from the intended benefactor and be at pains to ensure any suggestion of undue influence or coercion (even by others than the charity) is demonstratively without foundation.

A lawyer making a will for anyone, especially when frailty of any kind is evident, has an enormously high duty to that person. Lawyers acting for charities should now consider even more carefully whether they should in any way act for proposed benefactors (whether in wills or otherwise) of that charity.

This article was written by Graham Corney, Consultant

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On a side note, the types of gifts to charities should also be carefully considered as a gift of real property for example can trigger Capital Gain Tax.

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