For names’ sake! Naming charities in wills

Testators have an infuriating tendency to misremember names of institutions that they wish to benefit. When drafting a will containing gifts to institutions, it is good practice to check and, in the case of registered charities, to include the relevant registration number.

In Re Recher’s Will Trust [1972] Ch 526, Mr Justice Brightman said: “I would myself take the view that it is the most elementary duty of a professional adviser in a case such as the present, not only to get the name of the unincorporated association right, but also to confirm that the association is still in existence when the will is made, and not to rely, as presumably this professional adviser relied, on inaccurate information furnished by the client.”

In Knipe, His Honour Judge Matthews had to grapple with a number of problematic gifts, and the case usefully illustrates the court’s approach to construction problems.

Facts

The deceased was a retired racing driver and a long-standing member of the British Racing Drivers’ Club. 

He gave his cohabitee a right to occupy his home for life and left his half-share in another property to his mother, aged 105. The residue of the estate was left in varying shares to different institutions, some of which were wrongly named. 

The cohabitee had initiated proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 (IPFDA 1975) but her claim could not be resolved until the identities of the residuary beneficiaries were settled. 

The executor therefore made an application under Civil Procedure Rule (CPR) 64.2, asking the court to:

• authorise the executor to pay the legacy to the elderly mother without waiting for settlement of the IPFDA 1975 application, and
• determine who was entitled to the shares in residue.

Payment to the deceased’s mother

His Honour Judge Matthews had no difficulty authorising payment to the mother. The estate was valued at just over £1m. The property left to the mother had been sold for £125,000. On the figures, he considered it to be “highly unlikely” that the IPFDA 1975 claim would be “agreed or adjudicated in such a sum as would eat into those proceeds of sale”. 

Moreover, the cohabitee did not challenge the CPR application and, in any event, the order would merely protect the executor from personal liability. It would not take away the cohabitee’s rights against the deceased’s mother. 

Shares in residue for racing drivers

The will directed that 50% of residue be held for the “British Racing Drivers Club Benevolent Fund” and 30% for the “British Racing Drivers Club”. 

Unfortunately, there is no institution called the “British Racing Drivers Club Benevolent Fund”. 

The British Racing Drivers’ Club exists. It is not a registered charity but does administer a benevolent fund called the “British Racing Drivers’ Club Motor Sport Charity”. 

The executor submitted that the deceased must have intended the 50% share to go to the British Racing Drivers’ Club Motor Sport Charity. The judge agreed. Given the deceased’s professional background, his membership of the club and his long familiarity with its affairs, as well as the absence of any other candidate, it was not credible that the deceased had any other institution in mind. 

In Marley v Rawlings [2015] AC 129, Lord Neuberger PSC (with whom all the other judges agreed) said: “Whether the document in question is a commercial contract or a will, the aim is to identify the intention of the party or parties to the document by interpreting the words used in their documentary, factual and commercial context.”

Here, the opening words of the 50% share to the “British Racing Drivers Club Benevolent Fund” clearly linked the benevolent fund to the British Racing Drivers’ Club. It was a simple case of construing the words in the will in the context in which the deceased used them. 

Shares in residue for cancer research

The second problem arose from a direction that 10% of the residue was to be held for “The Cancer Research Fund”. There is no existing registered charity known by this name, although there are two registered charities with similar names. They were willing to share the gift, but this would leave the executor at risk if another charity came forward, claiming to be entitled under that clause. 

The court had to decide whether the gift was to:

1. an institution which did exist but had ceased to exist at the date of the deceased’s death 
2. an institution which never existed, or 
3. a gift for a charitable purpose. 

The executor submitted that it was the third, citing the operational guidance from the Charity Commission, paragraph B2.2:

“It is not always obvious whether a gift is a gift for particular purposes (a purpose gift) or whether it is a gift to a particular institution. Where a gift is a purpose gift, the executors can decide for themselves how best to dispose of the legacy so as to further the relevant charitable purposes. In the case of a gift to an unincorporated charity, this can often be regarded as a gift for the particular charitable purposes of that charity rather than to the particular charity. This may be important where the particular charity has ceased to exist…”

There was no evidence that the deceased had any particular registered charity in mind at the time of making his will

His Honour Judge Matthews held that the meaning of the phrase “Cancer Research Fund” was ambiguous on the face of it. Accordingly, extrinsic evidence could be admitted to assist in its interpretation under section 21 of the Administration of Justice Act 1982. 

Research on the website of the Charity Commission showed that “Cancer Research Fund” was the name historically taken by certain subsidiary charities of larger registered charities (often hospitals or other medical institutions). All these subsidiaries have now been removed from the register of charities, because of amalgamating, using up or transferring their funds to others. In 2004, when the deceased made his will, there were four subsidiary charities so named, but none of them still exist. There was no evidence that the deceased had any particular registered charity in mind at the time of making his will, and neither did he have any strong connection to any particular cancer research charity.

The judge considered that the phrase “Cancer Research Fund” used by the deceased did not refer to a particular institution, even though expressed with initial capital letters. Instead, it referred to the general charitable purpose of cancer research. It was therefore for the claimant, as executor of the will, to apply the 10% share of residue for the general charitable purpose of cancer research. He could do this by dividing the residue between the two charities with similar names.

Even if that was wrong, and the gift was intended to refer to a particular institution, it was clear that the identity of the particular institution would not be critical to the gift. There would be no difficulty in establishing a general charitable intent, allowing the gift to be applied cy-près.

Moral for practitioners

When drafting, always check names and include provisions dealing with dissolution, amalgamation and so on.