Charity begins when the judge decides

Posted on August 26th, 2016

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by Felicity Wardhaugh

Charity when judge decidesFelicity Wardhaugh is a Special Counsel at Mullane & Lindsay in Newcastle and specialises in wills and estate planning, commercial dispute resolution & litigation, and employment law.

A recent Supreme Court decision, namely, Estate Polykarpou; Re a charity [2016] NSWSC 409 demonstrates the importance of keeping a will up to date or making substitute provisions in a will.  The testator who made her will was obviously a fan of the Oprah Winfrey show and left half her estate to the Oprah Angel Network (“OAN”).  Unfortunately, by the time she died the OAN had been dissolved and had not directed funds to                                                            any other charity on its dissolution.

The Executor sought judicial advice on the construction of the will and whether he could select another charity to receive the funds. If the gift failed the testator’s parents were to inherit the funds instead.  The Judge (Lindsay J) held that the testator had intended to leave her estate to charity and as a result the funds which were to go to OAN should now go “cy pres” (essentially in substitution) to the NSW Attorney General to establish a scheme for a similar charitable purpose.  The costs of the legal proceedings were totally borne by the estate, including the parents’ legal costs.  These costs could have been avoided if the testator had updated her will when the OAN dissolved or the will had provided for a substitute charity if the OAN gift failed.

Felicity Wardhaugh is a Special Counsel at Mullane & Lindsay, and practises extensively in Wills and Estate Planning, Commercial and other Litigation and Employment Law. If you require any assistance in these areas please contact Felicity Wardhaugh or contact our Newcastle office.

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