Defunct Charity Gift

A bequest in a will can fail for a number of reasons, one of the commonest of which is that the beneficiary is uncertain. For example, a bequest to a ‘cancer charity’ would fail because the words do not make it clear which particular charity is intended to benefit.

However, being very precise about the charity that one intends to benefit can create another problem if the charity later ceases to exist. If it has been taken over by another charity, the gift will normally pass to that charity. However, what happens if that charity also ceases to function?

A recent case dealt with this situation. The charity that was the intended recipient of the bequest had ceased and been absorbed into another charity, which subsequently went into liquidation. The executors of the estate sought a ruling by the court as to whether they had to make a payment to the insolvent successor charity or whether they were free to gift the sum to a different charity.

The court ruled that the executors were free to distribute the funds in question to the charity of their choice.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.