The author of this article, Elizabeth Neale, partner of law firm , considers issues arising where family members might contest a big transfer to a charity rather than to themselves. The editors of this news service are pleased to share these views with readers and invite responses. Please email tom.burroughes@wealthbriefing.com

It has been reported that Richard Cousins, the chief executive of Compass Group, left £41 million to Oxfam after he was killed with his fiancée, her daughter, and his two sons in a seaplane accident in Sydney on New Year's Eve 2017. Newspaper reports stated that Mr Cousins had intended to leave the bulk of his estate in trust for his sons, but the recently made will included a “common tragedy clause” (also known as a long stop or default clause) in favour of Oxfam.

Making a will is something many people put off, sometimes indefinitely. This can be for many reasons: superstition, a reluctance to face one’s own mortality and, as the tragic case of Mr Cousins and his family illustrates, or the need to contemplate the death of others, not just oneself. 

We tend to assume that when we die everything else will remain the same but when making a will, we need to consider the possibility that our nearest and dearest will not be alive to benefit. A well-made will will cover a number of possible scenarios – the death of a partner, the death of children and the death of all the immediate family, whether at the same time as the testator, before or after but before the estate has been distributed in full. These possibilities must be considered and a decision taken about what should happen in each situation so that the will can be drafted accordingly.

If none of the beneficiaries named in a will survive the testator or they all die before becoming entitled (because they have failed to meet a survivorship period or reach a specified age) then the estate will pass under the intestacy rules – either to the wider family or, if there is no wider family, the Crown.

A “common tragedy clause” is designed to cover this situation. The clause might benefit the wider family, friends or charities or a combination of these. Mr Cousins reportedly included significant gifts to his brothers as well as leaving the bulk of the estate to Oxfam. Alternatively, the ultimate destination of the estate can be left to the discretion of the executors, usually guided by a letter of wishes left by the testator. This approach offers greater flexibility to allow for changing circumstances.

The inclusion of a common tragedy clause in favour of a charity or charities might come as a surprise to the wider family who would have otherwise have benefited, particularly if the testator had no known connection with the charity chosen.  But, it is important to remember that freedom of testation – the right to leave your estate to whomever you choose – is a fundamental principle of English law.  This means that there is little a disappointed family member can do, unless there is a basis for challenging the will.

A disappointed family member may be able to make a claim against an estate if inadequate financial provision was made for him or her. Most commonly a claim would come from a spouse, unmarried partner or minor children. Claims can also come from those who were being financially supported by the deceased at the time of his death. A testator who has taken the care to include a common tragedy clause would generally have considered the possibility of such claims and made appropriate provision, but circumstances may have changed since the will was made so this type of claim can arise.

Claims against an estate can also arise when the deceased promised to make provision for someone either in his will or during his lifetime, but has failed to do so and the person expecting to benefit has acted to his detriment in reliance on the promise. If such a claim does arise the charity will need to take legal advice and may need to seek the approval of the Charity Commission if a settlement is contemplated.

Other ways a will can be challenged include lack of capacity, undue influence or that the testator did not understand and approve of the content of the will. If a testator has taken the care to include a common tragedy clause, then the scope for these sorts of claims may well be more limited.

Most gifts by will to charity are for the charity’s “general charitable purposes” ie it is for the charity to decide how to use the funds in line with its objects. A testator who plans to make a substantial gift to a charity should discuss the proposed gift with the charity, especially if he has particular wishes as to how the funds are to be used.  In appropriate circumstances, the testator may impose restrictions on the use of a gift.  Such restricted funds place additional burdens on the recipient charity and should only be created in conjunction with the charity to ensure that the restrictions are practical and meet the charity’s objects. 

Whatever is decided, a prudent testator should consider explaining the arrangements in the will to those who might be disappointed by it to avoid additional distress after his death.