Many people leave gifts to charities in their Wills. Unfortunately, by the time the testator passes away, the charity they chose might no longer exist. This could leave the executor wondering what to do about the gift.
Does the executor simply not pay the gift intended for the charity to anyone (in law this is referred to as a lapsed gift) or does does he/she pay it to another charity instead (in law known as as the cy-pres doctrine)?
The answer to that question depends on a number of things. First of all, did the charity that no longer exists actually become a different charity? Did it amalgamate with another charity? Was the work being done by that charity now being done by another? In cases like this, the new charity that is carrying on what the old one used to do is considered a successor charity, and the gift might be paid there instead. This is as close as the executor can get to fulfilling the testator's wishes.
Assuming there is no successor charity, you also need to look at whether the charitable gift named in the Will is intended to go to one particular organization, or whether it's really meant as a general charitable intent. This can be construed from the wording of the gift itself, and the context of the Will as a whole. As a general rule, gifts that seem more like a general charitable intent will be upheld and paid to the closest possible match to that general intent.
As always, the specific wording of a Will must be a deciding factor. Does the testator say anything about what happens to a charitable gift if the charity no longer exists? These days, experienced Wills lawyers will cover that off in the Will, knowing how much confusion and delay can be prevented by adding a simple sentence about what to do.
Always remember that a Will should not ever contain anything that can be taken two ways. For every person urging the executor to pay the gift to another charity, there is a beneficiary hoping that the gift will fall into the estate and be paid to them. If you have a charitable gift in your Will, check it to see what instructions you've left for this situation.
If you are an executor and just can't decide what you are supposed to do in your situation, I urge you to be careful, and keep in mind that if you make a mistake with the estate, you can be held personally liable for it. It's probably best to get a legal opinion on what to do.
Does the executor simply not pay the gift intended for the charity to anyone (in law this is referred to as a lapsed gift) or does does he/she pay it to another charity instead (in law known as as the cy-pres doctrine)?
The answer to that question depends on a number of things. First of all, did the charity that no longer exists actually become a different charity? Did it amalgamate with another charity? Was the work being done by that charity now being done by another? In cases like this, the new charity that is carrying on what the old one used to do is considered a successor charity, and the gift might be paid there instead. This is as close as the executor can get to fulfilling the testator's wishes.
Assuming there is no successor charity, you also need to look at whether the charitable gift named in the Will is intended to go to one particular organization, or whether it's really meant as a general charitable intent. This can be construed from the wording of the gift itself, and the context of the Will as a whole. As a general rule, gifts that seem more like a general charitable intent will be upheld and paid to the closest possible match to that general intent.
As always, the specific wording of a Will must be a deciding factor. Does the testator say anything about what happens to a charitable gift if the charity no longer exists? These days, experienced Wills lawyers will cover that off in the Will, knowing how much confusion and delay can be prevented by adding a simple sentence about what to do.
Always remember that a Will should not ever contain anything that can be taken two ways. For every person urging the executor to pay the gift to another charity, there is a beneficiary hoping that the gift will fall into the estate and be paid to them. If you have a charitable gift in your Will, check it to see what instructions you've left for this situation.
If you are an executor and just can't decide what you are supposed to do in your situation, I urge you to be careful, and keep in mind that if you make a mistake with the estate, you can be held personally liable for it. It's probably best to get a legal opinion on what to do.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.