Court decision

Charitable gifts in Wills – case update

By Greg Cox and Krystal Bellamy / 14 September 2020
3 min.
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Worthwhile read for: charities, donors

In two recent articles (published on 31 July 2020 and 25 August 2020) we discussed the separate decisions made by the Supreme Court of Queensland in Re Graham (deceased) and explained the importance of ensuring that the wording of a gift to a charity in a Will is drafted to be sufficiently wide enough to cover situations where a charity changes its name, amalgamates or ceases to exist before the Will-maker dies.

Yet another example of where things can go wrong was considered in the recent decision of the Supreme Court in Banwell v Attorney-General (Qld) [2020] QSC 239.

In that case, the deceased left her residuary estate equally between eight named or described charities. The issue however was that some of those named were not legal entities in existence at the date of death and others had changed their names before or after the Will was signed or the date of death.

As a result, the administrator of the estate made an application to the Court seeking directions and the Court then had to ascertain and give effect to the deceased’s testamentary wishes, which became an exercise in construction of the Will.

The Court considered the lapse rule (that is, a gift to an entity under a Will lapses if the entity is no longer in existence at the date of death) and the exceptions to that rule. Broadly, such a gift will not lapse where it is clear the deceased had a general charitable intention in making the gift. Additionally, if the Court is satisfied that the deceased’s intention was to benefit a charitable purpose promoted in the work of the named entity and that purpose remained capable of being fulfilled, the gift will not lapse.

Fortunately, after considering each of the gifts made by the deceased in her Will, the Court concluded that none of them lapsed and was able to generally give effect to the deceased’s wishes.

Take away points

Court applications carry considerable cost, delay and risk. In the above case, the deceased died in 2015 and left a modest estate with a net value of $450,000. 

Had the wording of the gifts in the Will been drafted appropriately and widely enough, the cost and delay associated with the application to the Court could have been avoided.

If you would like advice or assistance regarding charitable gifts in Wills, please contact our experienced Estates and Succession team.
 

Authors
Greg Cox
Special Counsel
Greg leads HopgoodGanim’s Estates and Succession team and offers more than 30 years’ experience in estate planning, administration and litigation.
Krystal Bellamy
Senior Associate
Krystal is a Senior Associate in our Estates and Succession team.

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