Do charities have a moral obligation to disclaim at gift in a will?
Charities should exercise caution when dealing with a dispute in relation to a will which provides a charitable legacy. Consideration should be given by the charity as to whether there is a “moral obligation” to decline to accept such a legacy. The 1970 case of Re Snowden provided guidance that still applies:
“The court and the Attorney General have power to give authority to charity trustees to make ex gratia payments out of funds held on charitable trusts. It is, however, a power which is not to be exercised lightly or on slender grounds but only in cases where it can be fairly said that if the charity were an individual it would be morally wrong of him to refuse to make the payment”.
What does this mean?
This does not mean that all legacies should simply be surrendered by the charity in the event of a dispute, because charities have a legal obligation to accept legacies.
The judge in the Snowden case made a distinction between cases in which the person making the will never intended the charity to receive a gift so large (in which case there may be a moral obligation for the charity to make a payment to a different beneficiary) and cases where the charity’s gift was intended but the deceased’s relatives consider that there was no moral justification for the gift to go to the charity rather than to the family.
The key difference is what the evidence indicates to have been the deceased’s intentions, not necessarily the view of the family members, despite their understandable disappointment.
Legal clarification
The Charities Act 2011 provides that if the charity believes there to be a moral obligation to make payment to a deceased’s family, the charity can make an application to the Charity Commission (or to the court or to the Attorney General) seeking authority to make payment to a deceased’s family members. Of course, the charity may not consider there to be a moral obligation and those circumstances will be explored separately.
The Charity Commission provides helpful guidance to charities in relation to such payments, including whether there are other charities involved or if the dispute will cause negative PR for the charity which could cause reduced legacy payments in the future.
The key recommendation by the Charity Commission is that specialist legal advice should be sought by the charity as soon as possible.
