Many charities rely on legacies left to them in the Wills of their supporters. It represents a crucial form of income, now more than ever. But every year, alongside cash legacies, many charities are also left items that bring with them a financial or administrative burden, such as a property in need of repair. This puts them in the difficult situation of whether to accept or reject this gift.
Emma Seaton, Solicitor at national law firm Stone King, explains:
“Whilst legacies left to charities in Wills are no doubt left with extremely good intentions by testators and are also a vital source of income for the charity, it is surprising how many ‘unwanted’ gifts are among them. Some non-cash legacies can actually be a drain on a charity’s resources, such as land that can’t be sold or developed, a derelict property in need of substantial repair or household items that the charity can’t use and for which the administrative burden of selling would outweigh the financial benefit.”
A charity can reject a legacy that has been left to them through a disclaimer. However, it depends on the wording of the Will because part of the legacy may also include assets that the charity values highly and would be of use to further its charitable objects.
"The charity then has the difficult task of weighing up whether to reject the legacy, or accept the ‘unwanted’ assets as well as the ‘wanted’ assets. Generally speaking, it is much easier for the charity to either accept the whole legacy left to them under the Will, or to reject it in its entirety.”
If a charity disclaims their legacy via a disclaimer, the legacy will pass to the next person or organisation entitled under the Will. However, a charity cannot disclaim an asset from which it has already derived a benefit. For example, if it has been left a property which is occupied by tenants the charity cannot accept any rental payments, otherwise it will be deemed to have accepted the asset.
To be effective, a disclaimer must be in writing and be made within two years of the date of the deceased’s death.
For more information contact Emma Seaton, or another member of Stone King’s charity legacy team.