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Charity Legacies Changes

The Charities Act 2022 will bring several changes this year and next year which aim to reduce ‘unnecessary bureaucracy in current processes’ and make it easier for charities and their trustees.  This includes their discretion over the offering of financial settlements in legacy disputes.

Currently charity trustees must act in the best interests of the charity which generally prevents them from reaching financial settlements with third parties who are disputing a legacy which has been left to the charity.

Over the years there have been a number of lengthy and costly court battles between charities and the families or beneficiaries of Wills. In the future trustees of charities will no longer need the permission of the Charity Commission to make ex gratia payments in order to settle a disagreement. The maximum which can be offered will be dependent on the charity’s annual turnover, for example a charity with an income of over £1m will be able to make payments of £10,000.  The trustees will also be able to delegate this discretion to others within the charity.

The implementation of the Act is expected in three phases beginning this autumn and again in spring and autumn 2023.

To avoid any dispute over your estate it is important to make sure you have an up to date  Will and to leave clear and specific instructions to your executors who will carry out your wishes after your death. If you are thinking of leaving a legacy to a charity, then it is sensible to also leave a letter of wishes which details your bequest, especially if it is a substantial gift.

If you would like advice about making a  Will and leaving a legacy to a charity, get in touch with our team today.

Alex Astley can be contacted at a.astley@gullands.com

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