Many people generously leave gifts to charities in their Wills to support the community or important causes.
Unfortunately, these gifts sometimes run into issues when the charities named in the Will amalgamate with other charities, are wound up, or where the charity is not described correctly.
It is possible for these charitable gifts to still take effect, however, it depends on why the gift lapsed, as well as the gift’s wording.
Ideally, the Will should contain a clause giving the executor the power to select a similar charity, avoiding the estate from incurring expenses trying to resolve the issue.
Where the Will does not contain a clause giving the executor the power to select a similar charity, the executor may need to make a cy-pres (pronounced sigh pray) application. This is a request to the Attorney-General or Supreme Court requesting they intervene and redirect the gift to an appropriate charity.
How can a gift to a charity fail?
There are several ways a gift to a charity may fail or lapse. These include the following situations:
- The charity named in the Will has amalgamated, and is now a new entity.
- The charity named in the Will has wound up, and no longer exists.
- The charity was named or described incorrectly in the Will.
Because the charity no longer exists (at least in the same form), or ‘never’ existed if it was incorrectly named, the gift needs to be able to pass to someone else.
An example of this is demonstrated in Gray v Australian Cancer Foundation for Medical Research [1999] NSWSC 492. The deceased left most of his estate to ‘the Cancer Research Foundation’. His Will was made in 1984, with a gift to the same charity also appearing in his previous 1979 Will.
An issue arose because no charity existed known as ‘the Cancer Research Foundation’. Three charities claimed they were entitled to the gift, namely the:
- Australian Cancer Foundation for Medical Research, which incorporated in 1984, and later changed its name to the Australian Cancer Research Foundation
- University of Sydney, as the Melanoma Foundation
- Cancer Council.
The Supreme Court found that the history of the charities’ names, community awareness of the charities, and the history of the deceased’s previous Wills, meant that none of those claimant charities were whom the deceased was referring to when he named ‘the Cancer Foundation’. The court then distributed the gift by cy-pres.
Source: FS Advice, by Geoffrey Milani
