Gifts to Charity in a Last Will and Testament
Janet Cribb
Giving to charity is something many people want to do in a Last Will and Testament. It sounds very straightforward, but as with everything else to do with Wills it must be correctly worded and carefully thought through. This article points out some of the ways in which good intentions may not be met unless great care is taken with drafting.
In countries where there is still death duty or inheritance tax, charitable gifts in a Last Will and Testament are usually exempt from such taxes; this makes it an attractive option and adds to the appeal of supporting a favourite cause after your death. However, in order to qualify as a charitable gift, the organisation on the receiving end must have official charitable status through a registration system in the country of your domicile. If you live abroad and want to leave a gift to a local charity then it will not qualify for exemption unless it is registered or acknowledged in some formal way in your home country. Confused?
Let’s take as an example, the Christina Noble Children’s Foundation. Christina Noble had a strong feeling that she should help Vietnamese children, and against all the odds she achieved remarkable results (read her book Bridge Across My Sorrows if you would like to know more about her). If you look at the donation page on the Foundations web-site you will see that the organisation has offices in several different countries. (http://www.cncf.org) If you are English domiciled then your gift should be left specifically to The Christina Noble Foundation in England and quote the registered Charity number which is given on the web-site. A gift left, for example, to the Christina Noble Children’s Foundation in Vietnam may not be allowable against Tax in a Will probated elsewhere, such as the US or UK. It is a good idea to include the address in the Will; printing the relevant page from the web-site as well as quoting the registered charity number in the Will would make absolutely sure that your gift reaches the intended beneficiary. The printed web page can be stored with the Will. This simple piece of admin would go a long way to prevent confusion; it will also help the Executors by giving them the contact details they need. The same principle applies to the big charities, such as Save the Children, the Worldwide Fund for Nature, UNICEF etc, make sure you say which of the organisation’s National Offices will be the recipient of the gift and quote the registered charity number or tax number.
A good example of how badly things can go wrong is borne out by the following story, of a gentleman who lived most of his life as a British ex-pat in Hong Kong. He made his Will when Hong Kong was still a British colony and he died after the handover in 1997. He had left his residuary estate (which means most of it) to the Royal Society for the Prevention of Cruelty to Animals, intending it for the benefit of animals in Hong Kong (where the money would have been very helpful as few people leave anything to animal charities in HK, unlike the UK where the RSPCA is a popular charity in Wills). Unfortunately the Will was poorly drafted, the RSPCA dropped the ‘Royal’ after 30.6.1997 and so the gift failed in HK because the name didn’t match the Will and all the money went to England. Now, had someone taken the trouble to qualify the gift as ‘for the care of animals in Hong Kong’ and quoted the relevant tax number, and also made provision for the possibility of the charity changing its name, then the animal population of Hong Kong would have benefited to the tune of millions of dollars. However, the gift was sent to the RSPCA in England and none of it was returned to Hong Kong.
It is important to include somewhere in the Will a clause which qualifies all charitable gifts should a charity change its name, or the gift would otherwise not fulfil the wishes of the Testator. Maybe the charity is being wound up and the money would not be used for the purpose intended. The Trustees should have the option to choose another charity to benefit instead. Recently the Cancer charities in the UK pooled their administration to save money and changed the names in the process. What used to be the MacMillan Nurses is now MacMillan Cancer Support Registered Charity Number 261017.
Some ‘charities’ may not have a registered charity number as they are considered pressure groups and the charities commission have not accepted them as bona Fide charities, so it pays to be selective and do a bit of homework before you commit yourself in the Will. (Some animal rights organisations come into this category)
It is generally best to leave the use of the gift to the discretion of the charity; otherwise your Trustees will be obliged to make sure the gift is used for the purpose you specify, which can make life difficult for them. However, there are exceptions:
Tewkesbury Abbey was in the middle of yet another appeal for repairs to the fabric. It is a large medieval building in Gloucestershire, UK, and raising the necessary £5million to restore the stonework and keep the building in good repair to last another 1000 years was difficult! It is, after all, just a Parish Church. (http://www.tewkesburyabbey.org.uk). The money raised through the appeal did not stretch to cleaning the ceiling of the nave. Originally this beautiful ceiling had been painted green and gold in Victorian times, but simultaneously the Victorians installed two coal fired boilers in an attempt to keep the temperature above freezing in the winter. Before long the ceiling was almost black from the emissions from the boilers. You couldn’t see the paint or even the carvings down the middle where the vaults met. Some time much later the boilers were converted to gas, but the ceilings remained coated in a layer of grime. A kind lady left the Abbey enough money in her Will to clean the soot off the ceiling, and that was the purpose of the gift which could not be used for any other work that was going on, however badly the money was needed elsewhere in the building. After several months of scaffolding and careful restoration the abbey now has a beautiful clean ceiling in the nave, except for one small strip at the West end which was left to show how bad it had been!
Below is a link to useful information about different countries arrangements for Charities and giving.
(http://en.wikipedia.org/wiki/Charitable_organization#International_focus)
(http://www.charitychoice.co.uk/)
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Janet Cribb
Channel: Wills & Living Trusts |
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