21 January 2015

Charities Fight Back in Will Wars Disputes

Charlie Young
Charlie Young Litigation Lawyer

Sweeping Federal Government cuts to charities means fundraising pressure may lead to them fighting in the courts to keep will bequests in contested will cases, according to Brisbane estate litigation lawyer, Charlie Young.

He said media reports that hundreds of charities and social service providers across Australia face the prospect of closing after they were told they no longer qualified for Federal Government funding would force the charities to pursue every fundraising measure possible.

Bequests in Wills, sometimes for substantial sums, have often been the first stop in a contested will case, with bequests to charities being pared back to satisfy other claimants. Until now charity groups have rarely objected.

Mr Young, an estate litigation lawyer with Brisbane firm Bennett & Philp Lawyers, said charities have largely accepted over the years that bequests to them under a will are likely to be reduced in any settlement of a will dispute.

“But the pressure’s really on charities now with the Government last year saying it was cutting $271 million from the Department of Social Services (DSS) Discretionary Grants Program over the next four years. Charities will struggle to meet fundraising targets and some reports predict hundreds will shut down across Australia as the income tap is turned off,” he said.

“At present if someone contests a Will it’s up to the parties to negotiate a resolution or the matter will need to go to trial. In negotiating a resolution, the parties will often agree for any amount bequested to a charity to be partly or even fully redirected to the person contesting the Will, then seek Supreme or District Court approval for the action.

Charities are informed of the action but rarely object to it, but I think that’s going to change,” Mr Young said.

The Government had opened up its Discretionary Grants Program to a competitive tender process. Media reports stated more than 5,500 new and existing charities and service providers applied for grants across 26 different funding rounds as part of that process. But only 700 organisations, including around 100 new organisations, were shortlisted as preferred providers and are now negotiating with the DSS for a share of the $800 million in available funding.

“Reduced Government grant funding amid a tighter economy and fundraising shortfalls mean charities are going through a belt-tightening exercise and now realise bequests in Wills could be a significant source of income.

Media reports quote the Australian Council of Social Services as saying many organisations were advised they had been unsuccessful for Government grants just three days before Christmas, and that most would run out of money by the end of February.

Meanwhile the Red Cross says 500 jobs will be lost after the Immigration Department slashed funding for the charity’s asylum seeker support service.

“I expect to see more objections from charities to cuts to their bequests as they move to protect such intended donations. A charity might very well argue that the intentions of the deceased to leave a bequest to that charity should be upheld,” Mr Young said.

I know that some charities have taken steps in other states to try and protect their bequests but it is for the most part uncommon in Queensland. This is going to change as we move into the future, I believe,” Mr Young added.

He said charities had traditionally taken the view to accept any proposed cut to their bequest under a Will, whether that be due to charities being fearful of negative publicity, or feeling they have a moral obligation to accept a resolution with a disappointed family member or perhaps weighing up the possible legal costs of objecting.

“Many of the bequests are reasonably large and if you factor in the number of Wills that are challenged each year and the possible sums deducted from bequests to charities to resolve will disputes, then it adds up and charities now see they need to protect the donations intended for them as they could represent significant lost income if not challenged,” Mr Young said.

 

 


Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

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