When distributing a deceased estate, problems sometimes arise in relation to the identification of the person or organisation to inherit under the will (‘the beneficiary’). Gifts to charities are frequently the subject of applications to the Court for rectification or construction of the will. For example, where a charitable organisation no longer exists or has been taken over by another company.
It is important to properly identify the name of the charity in the will where a gift is left for a charitable purpose. Where the charity is not properly identified the gift may fail and the altruistic intentions of the will maker will also fail.
One example of such a situation is the case of Re Coughlan. The will-maker in this case included a gift of one third of the residue of his estate to ‘Diabetes Australia of 26 [sic] Street Glebe New South Wales’. There was no organisation by that name at that address after the death of the will maker. The executor managed to identify three different charities which might have been intended to benefit. The Court ultimately decided that the gift was to pass to Diabetes Australia as the umbrella body for Australian’s living with diabetes, noting the deceased general charitable intention was not limited to a specific geographical area.
The case shows that it is important to take the trouble to ensure that a charity is correctly identified in a will. It is important to also include the charity’s ABN or ACN as an identifier in case there is a change of name. The estate in Re Coughlan incurred significant fees in seeking orders from the Court as to the proper construction of the charitable gift which could have been avoided if the charity was correctly identified in the will. This is something for will-makers to keep in mind when considering leaving a gift to a charity by will.
For more tips on preventing the failure of gifts made by a will check out our blog. Or if you would like advice from our experienced lawyers about creating or changing a will, contact us today.
DISCLAIMER: The information contained in this article is general and is not intended to be advice on any matter. It is for information only and is not legal advice. In the event of a legal problem, you should seek legal advice.