The cy-près doctrine is a powerful means of saving charitable legacies in a will when they might otherwise fail due to poor drafting, a lack of certainty or want of a recognisable beneficiary. This article considers the doctrine’s wide-ranging application and what the personal representatives of an estate might do when faced with the possible failure of a charitable legacy.
A charitable legacy may fail when made to a charity which:
This may result in it being very difficult to distribute someone’s estate precisely in accordance with their testamentary wishes. However, the cy-près doctrine can guide personal representatives through these uncertainties and enable the testator’s charitable wishes contained within a will to be carried out.
Derived from the Old French meaning 'as near as possible', the cy-près doctrine allows the personal representatives of an estate to direct a gift intended for one charity to a similar charity, or a charity which has incorporated the original beneficiary. This prevents a failed gift falling into the residue of an estate and potentially passing to a different beneficiary.
For the doctrine to apply, it must be abundantly clear that a will contains a general and unconditional charitable intention or purpose, and the new purpose of the gift must be as close as possible to the original purpose; the original and ‘replacement’ charities must be sufficiently similar in nature and have similar objects.
An application to apply the doctrine to a charitable legacy would be made to the Charity Commission. However, before this is considered, the personal representatives of an estate should try to construe a gift made to a named charity as one for its general charitable purposes as far as possible. The gift can then be directed to another charity with the same objects as the original beneficiary without any further reference to the Charity Commission, and therefore without delaying the administration of the estate or engaging in any time-consuming applications.
If the personal representatives cannot resolve any ambiguity surrounding the distribution of a charitable legacy themselves, the Charity Commission possesses a discretionary power under section 67 of the Charities Act 2011 to implement a cy-près scheme where gifts are made to charities whose existing trusts or purposes can no longer be carried out, applying a gift for such charitable purposes as the Charity Commission considers appropriate.
The Charities Act 2011 requires one of the following cy-près 'occasions' to exist before applying the doctrine:
For every case, regard must also be had to each of the following:
The Charity Commission has provided the following guidance:
“We should be flexible and imaginative in applying the cy-près doctrine, balancing usefulness and practicality with respect for the existing purposes and beneficiaries. The purpose of making a cy-près Scheme is to enable a charity to continue being effective, useful and relevant to its beneficiaries’ needs in modern society, where without our intervention it would not be. We should, however, exercise caution where a proposed change might be a significant departure from the founder’s intentions or might exclude existing beneficiaries”. Charity Commission: Operational Guidance: Application of property cy-près, May 2024
Importantly, the Charity Commission will not exercise its power where a case is of an especially contentious character, for example where multiple charities exist with competing claims, or where any special question of law or fact is involved which means the case would be more fit to be adjudicated on by the court.
Poorly drafted and ambiguous wills expose personal representatives to the risk of personal liability for conducting the administration of an estate incorrectly if they attempt to distribute a charitable legacy which has failed.
In the first instance, it's always advisable to check whether a recipient charity’s name and registered number are accurately reflected in the will or other trust document. This can be done by contacting the charity directly or referring to the Charity Commission’s central register. Doing this also ensures any change of name, amalgamation, split or merger is addressed.
If any drafting errors are discovered, the Charity Commission’s website can be consulted for former charity names and addresses. It would also be sensible to check the original will file and seek comment from other beneficiaries under the will or family members of the deceased, to gauge where consensus lies with any potentially failed gifts, and invite agreement as to where a gift might be directed.
If a will or trust document includes an express cy-près clause to cater for the possible failure of charitable legacies, this should serve as a primary guide for administering the gift. For example, the Law Society’s Private Client Section and the Institute of Legacy Management’s ‘Charities as Beneficiaries’ (3rd edition) states:
“If before my death (or after my death but before my trustees have given effect to the gift), any charitable or other body to which a gift is made by this will or any codicil to is has changed its name or amalgamated with any other body, or transferred all its assets to any other body, then my trustees shall give effect to the gift as if it were a gift to the body in its changed name or to the body resulting from the amalgamation or to the body to which the assets have been transferred.”
Only if no cy-près clause exists and the relevant personal representatives or trustees cannot resolve any ambiguity themselves should an application to the Charity Commission for a scheme be made.
Ultimately, it remains important to seek professional advice when catering for the possibility of failed gifts, whether as an individual preparing one’s own will, setting up a charity, or fundraising to meet the charitable objects of a charity.
For further information, please contact the wills and inheritance disputes team.
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