Should charities be more active in estate administration?

Should charities be more active in estate administration?

To what extent should charities, as beneficiaries, seek to play a more active role in the administration of estates?

   

Spencer Wisdom, solicitor and legacy manager at Battersea Dogs & Cats Home

As the representative of a beneficiary of an estate, a charity legacy professional has certain obligations, both to their trustees and to the Charity Commission, that a private individual beneficiary does not have. The charity professional’s overriding obligation is to ensure their organisation receives the full value of its entitlement in the estate, and this will necessitate an active involvement in the administration.

Over the past decade or so, most charities have rightly moved on from the rather passive ‘bank and thank’ approach, in which they played little or no role in the administration, to trying to work more closely with the executors in order to maximise the value of the estate.

At the same time, charities do need to be conscious that administering an estate is an onerous task and one which professional executors, quite rightly, expect to be able to conduct and charge for appropriately, without undue interference. This is particularly the case where there are multiple charitable beneficiaries.

    

Adam Buckles, legacy programme manager at The Brooke

While it may not be important for legacy fundraisers to be involved with the actual administration of an estate, they certainly should have a good knowledge of the processes involved in leaving a gift in a will.

Fundraisers are the face of our charities, and we have a responsibility to make sure that they are fully prepared when going out and speaking to our supporters. The more knowledge they have on the practicalities surrounding leaving a legacy, the more they can reassure supporters that their decision to leave a gift is the right one.

At the Brooke, we run regular ‘hot seating’ sessions on topical subjects that relate to legacy giving and also on the typical sort of questions that one might be asked by a supporter. Having a sound knowledge of legacy administration gives my fundraisers confidence that they can handle most questions that are put to them.

    

Richard Roberts, director, Gedye & Sons Solicitors Ltd

The relationship between fundraisers and solicitors can be beneficial, with good communication. Fundraisers need to work closely with will draftsmen in providing them with better information about what it costs to provide charity services (e.g. £500 will keep a hospice bed serviced for 12 hours). Regular, but succinct, e-mail bulletins to solicitors with this information means that they can be better ambassadors for the charities.

Post-death solicitors should involve the charity immediately, ask for a representative to attend the funeral and keep the charity up to date in the work of the administration. They should provide digital pictures of the home if there are costly issues of clearance or valuation.

Neither party is psychic; the solicitor may have known the deceased for many years, the charity perhaps not. The former must not be afraid of giving wider background details of the estate assets, and the latter must make clear requests for information that isn’t obvious to them. Monthly or even fortnightly updates are essential.

   

Claire Routley, head of legacy giving, Bible Society

It’s very important for fundraisers to play an active role in the administration of legacies, and there’s a clear economic and ethical case for doing so. In the last year alone, we’ve added thousands of pounds in value to our legacy income through taking an active role in the administration of our legacy gifts, from making tax savings to increasing the sale price of properties. After all, we have a responsibility to the people who have been kind enough to remember us in their wills to ensure that their generosity has the maximum impact on our beneficiaries.

However, we also know that there can be a potential conflict between receiving the maximum amount of income and the charity’s relationship with the executor who is administering the estate. We’re careful to try and balance the two, for example by understanding the particular situation of lay executors who may be undertaking a complex task for the first time, while dealing with their own bereavement.

   

Stephen Richards, solicitor, Charity Legacy and Contentious Trust & Succession Group, Withers LLP

The increasingly important role that legacies play for any charity means that looking after supporters and donors is critical.
During a benefactor’s lifetime the relationship with the charity is key, and the legacy fundraisers provide a vital point of contact. Legacy fundraisers have opportunities to explain how financial support for the charity generally, or for a specific project, enables the charity to achieve its objects.
Following a benefactor’s death a legacy administrator has an equally important role working with the personal representatives to ensure a benefactor’s wishes are followed. Legacy administrators are often well placed to spot issues (such as attribution of inheritance tax and potential development in properties) that will increase the value of an estate and therefore the share passing to charity.
Our experience is that charities with collaborative individuals or teams dedicated to both legacy fundraising and legacy administration achieve a better profile for the charity, a consistent approach during lifetime and following death and, importantly, an increased income for the charity.

 

This article first appeared in The Fundraiser magazine, Issue 30, June 2013

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