Where a legacy under a will is left to a party that does not appear to exist, or at least cannot be identified, this can intensify what is an already traumatic experience for the deceased’s loved ones. When this happens, who should receive the legacy?
In the recent petition by Vindex Trustees Limited [2021] CSIH 46, the Inner House of the Court of Session declined to provide directions on this question. The petition for directions was lodged by the late Estelle Brownrigg’s sole executor, who sought direction from the court as to what to do with certain estate funds in light of an apparent error in the will when naming a beneficiary.
Background
The late Estelle Brownrigg was born in South Africa in 1945 and lived and was educated there through her teenage years. Ms Brownrigg eventually moved to Scotland together with her late husband in 2012. On her death, she left an estate valued at approximately £1.35 million. With the exception of a legacy made to a friend, the net residue of her estate was to be divided between the Scottish National Party and three charities. One of these charities was described in the will as the “Nelson Mandela Educational Fund, South Africa” (“the Mandela Fund”).
The Mandela Fund was due to receive a one sixth share of the residue of the deceased’s estate. Having conducted its own research, and having consulted with the solicitors responsible for the preparation of the deceased’s will, the executor, Vindex Trustees Limited, could find no information relating to a charity under that name. The executor therefore petitioned the court for direction as to whether they could make payment of the sum owed to the Mandela Fund to a similarly named organisation that it believed was the intended legatee.
The Charity
In an attempt to locate the named charity, the executor ran a search in the South African Register of Non-Profit Organisations. This showed that at the time of the deceased making her will in March 2003, three charities were registered in South Africa containing the words “Nelson Mandela”:
- The Nelson Mandela Children’s Fund registered in February 1999;
- The Young Women’s Christian Association (Nelson Mandela Port Elizabeth) registered in November 2002; and
- The Nasoda Nelson Mandela Local registered in February 2003.
Of the three, the Nelson Mandela Children’s Fund was the longest running at the time the will was drafted. The Nelson Mandela Children’s Fund’s focus on the education and development of young people was also in keeping with the name of the Mandela Fund specified in Ms Brownrigg’s will. The petitioner determined that it was the most likely intended recipient of Ms Brownrigg’s legacy.
The Court of Session
The executor petitioned the court for direction. The court was asked to determine whether the executor could properly distribute one sixth of the residue of the estate to the Nelson Mandela Children’s Fund.
The court declined to make directions and refused the petition, noting that it “does not consider that it should adjudicate or give advice on the matter”. Importantly, however, the court did not state that the executor could not make payment to the Nelson Mandela Children’s Fund.
In reaching its decision, the court considered this was ultimately a question that fell to be resolved by “the exercise of the executor’s managerial discretion and good judgment”, while noting “that the petitioner has the comfort of knowing that it would be acting in accordance with the views of counsel. He advised that, on the information before him, it seemed that the Children’s Fund was the intended beneficiary, and that if the executor was of the same opinion it could proceed accordingly”.
The court also noted that it did not think the executor had acted unreasonably in raising the petition, based on advice from Counsel.
Comment
The case serves as a useful reminder of the distinction between matters of law that need to be determined by a court and matters of administration and judgement. Where a matter is deemed to belong to the latter category the court will be reluctant to exercise its powers to offer direction.
Each case will depend on its own facts and circumstances and where there is some uncertainty in relation to who should receive a legacy, it is important that executors take appropriate advice, including from Counsel where appropriate, particularly where there is the potential for competing claims to the legacy. Indemnity insurance may also be considered to protect the executor against personal liability.
Our experience
We have experience of advising clients in relation to similar situations and we can assist executors or potential beneficiaries in this regard. For example, we recently advised the sole trustee of a liferent trust created under a will. The trustee wished to make over the trust capital to a charity at the termination of the liferent in terms of the will but the charity that had been entitled to the capital at the start of the liferent no longer existed.
Thorough investigations were carried out to ascertain the identity of the charity’s successor. A possible successor was identified, but there was inconclusive evidence to establish this beyond doubt. Various options were considered, including presenting a special case to the Court of Session, but ultimately the matter was resolved by the funds being transferred to the likely successor and the trustee obtaining legal indemnity insurance to protect it in the event a claim was made by another successor charity.
For more information, please contact Thomas McFarlane, Associate in our dispute resolution and litigation team, at thomas.mcfarlane@shepwedd.com. Additional reporting contributed by Andrew Buchan.