Charities as Beneficiaries of Estates - FAQs

When Can Charity Beneficiaries Expect to Be Notified of Their Entitlement Under a Will?

The point at which the Personal Representatives (or 'PRs' - covering both executors and administrators) are required to make contact with a charity beneficiary in respect of their entitlement under a Will is not set out in law.

Some charity beneficiaries will hear from the PRs soon after the death, others will hear much later (if, for example, there is a delay in the PRs commencing the administration process). Other charity beneficiaries may never hear from the PRs at all, learning about their entitlement instead from legacy notification companies (such as Smee & Ford) - which scan thousands of Wills each week (Wills which have become public documents, following probate being granted) in order to be able to alert charities to their entitlement - or otherwise from friends or contacts of the deceased.

Allowing for the funeral, the location of the original Will, the determination of the PRs and, potentially, the instruction of solicitors to assist with the administration - it is not uncommon for there to follow a short delay between the date of death and the PRs of a deceased's estate first making contact with the charity beneficiaries. It is however good practice for initial contact to be made as soon as is practicable and possible, in the circumstances.

For those charity beneficiaries who learn of their entitlement before being formally notified by the PRs, it can be difficult to know what steps to take next.

If the charity knows the names of the PRs, or the name of the firm acting on behalf of the PRs, they may decide to make initial contact. If the charity does not know these details, the appropriate next steps to take can be less clear:

• Is it okay to write to the family if they are known to the charity?
• Is it okay to write to the bereaved spouse/civil partner of the deceased if they are known to the charity?
• How should the matter of entitlement be handled in any correspondence, given the sensitivities?
• Are there any public relations issues at play in terms of contacting the family?

These are all common questions we hear from our charity beneficiaries. The short answer to all of these questions is that there is no 'one size fits all' approach; each matter needs to be considered on the facts and there is often a balancing exercise to be done in order for the charity to find an approach they feel comfortable with.

Once notified, in whichever manner, it is down to the charity to decide how to respond. It may be that the PRs' first correspondence with the charity goes no further than notifying them of the death and of their entitlement in general terms (see below). At that point some charities will have their own processes in place to enable them to check their records and ascertain whether the deceased may have been a supporter of the charity during their lifetime. If the deceased was known to the charity, the charity may then ask the PRs to pass on their condolences to the family. The charity may at that stage, and in the interests of sensitivity, also want to take steps to ensure that no further communication (eg the charity's annual update) is sent to the spouse/civil partner of the deceased.

What Information Can Charity Beneficiaries Expect to Receive from the PRs at the Outset of Estate Administration?

At the very outset of an administration, the PRs will not usually be in a position to provide detailed information in respect of the assets and liabilities of the estate. This is often because the process of ascertaining and valuing those assets and liabilities has not yet begun. For that reason, the PRs may only communicate with the charity beneficiaries in general terms to begin with - notifying them of the death and, if applicable, the firm of solicitors instructed to deal with the administration, as well as the charity's entitlement under the Will (eg "you have been left a specific legacy of a property" or "you are entitled to a 1/3 share of the residuary estate").

Some PRs will, at that stage, provide the charity beneficiaries with a copy of the last Will and Codicils if applicable. Others may wait until the Grant of Representation has been issued (at which point the Will becomes a public document) before sending out copies of the Will.

If solicitors have been instructed to assist the PRs with the administration, it is good practice for the PRs to provide charities who are residuary beneficiaries with a copy of the solicitor's terms and conditions. The Solicitors Regulation Authority encourages solicitors to provide information on not just their terms, but also their charges, to the residuary beneficiaries of an estate. This is however 'best practice', rather than any sort of legal obligation on the PRs, or professional obligation on their solicitors.

Before the Grant of Representation Has Been Obtained, How Often Should Charity Beneficiaries Expect to Hear from the PRs?

It is not uncommon for PRs to 'go quiet' after making initial contact with charity beneficiaries at the outset of an administration. This is because there often follows a busy period, during which the PRs are working to identify and value all assets and liabilities in the estate, in order to be able to report the inheritance tax position to HMRC and apply for the Grant of Representation.

The next time the charity beneficiaries hear from the PRs could be once the Grant of Representation has been obtained. The PRs may however write to the charity beneficiaries before this, perhaps to update them of any delays in reporting to HMRC, or delays in applying to the Probate Registry, or perhaps even to start encouraging the charity beneficiary to look ahead to exactly how they would like their entitlement to be transferred to them.

Different types of charity beneficiaries can expect to receive different levels of information as the administration progresses:

• Pecuniary legatees (ie charities left a cash sum in the Will) can expect to be provided with a copy of the Will and updates as to timescales only.
• Specific legatees (ie charity beneficiaries left a specific legacy such a property in the Will) can expect to be provided with a copy of the Will and updates as to timescales, as well as information about the likely value of the gift (once established by the PRs) and, if appropriate, options as to how the gift may be transferred to the charity (we will cover more on this in our forthcoming articles).
• Residuary beneficiaries (ie those sharing in the residuary estate) can expect all of the above, plus additional information such as schedules of assets and liabilities, Estate Accounts, a statement of income and any relevant valuations. Again, we will cover some of these areas more detail in our forthcoming articles.

Where there are multiple charitable beneficiaries of an estate, and where PRs have instructed solicitors to assist with the administration, it is not uncommon for the solicitors to request that one charity is nominated to be the 'lead charity'. This nomination will need to be agreed by all of the other charity beneficiaries. This is done with a view of avoiding the duplication of time (and the associated cost to the estate); it means that, moving forward, the solicitors will only need to correspond with one lead charity, who in turn will disseminate the information to the others.

Next Time…

In this article we have focused on the early stages of an estate administration. In our forthcoming articles we will turn our focus to the mid and final stages of an estate administration, drawing on some of our frequently asked questions and covering topics including:

• Inheritance Tax and 'grossing up'
• Capital Gains Tax
• Appropriation of property/land and Charities Act 2011 requirements
• Income Tax
• Pecuniary legacies and 'the executor's year'
• Estate Accounts
• Costs transparency
• Delays to the administration
• Personal belongings and Letters of Wishes

For further information please contact our Legacy Protection team who will be happy to provide free initial advice. Please contact Leila Goodarzi on 07909 682364, or complete the form below.