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As discussed in our previous blogs, a large portion of charities income arises from legacies left under a testator’s Will. In the same way an individual would be, charities are also susceptible to Will fraud which can minimise, and in the worst case remove, any legacy a charity was due to inherit.
Examples of Will fraud where a charity was due to inherit
Will fraud can take place in a number of ways, and most commonly as below:
- The executor failing to properly administer the estate, not providing the charity with the legacy it was due to inherit;
- The executor creating false costs in order to minimise the beneficiaries inheritance, including any charitable beneficiary;
- A fake charity being set up with the similar name to a real one, in order to receive an inheritance due to that real charity; or
- An attorney fraudulently dissipating the funds of a testator during their life so that on death there is minimal remaining funds to be distributed.
Whilst it is unimaginable that anyone would steal from a charity, this is a very real threat and occurs more commonly than expected. A case which came to light earlier this year is an example of this, which demonstrated how an executor acting fraudulently nearly resulted in the charity missing out on an inheritance of £1,600,000.
Case law
In the case of Canon Collins Educational and Legal Assistance Trust 2017 v Allie, the testator left her estate of £1,600,000 to Canon Collins Educational and Legal Assistance Trust 2017. The executor appointed was a Solicitor whom on obtaining the grant of probate, failed to notify the charity of the Will and their expected inheritance. The executor decided to use the money for his own use and purchased an expensive property to live in and kept the remaining funds.
The charity later became aware of this and began proceedings in order to claw back their due inheritance. The Charity was successful in their claim, however this was at great legal expense. It is expected the Charity will be able to recover their legal costs but this is again more work the Charity need not involve itself with if the executor had acted properly.
Cases like the above are common, albeit not always with such a large inheritance.
How Nelsons can help
Stuart Parris is a Trainee Solicitor at Nelsons.
If you act for a charity and feel you are potentially being defrauded by a fraudulent executor, please contact a member of our Inheritance Disputes team in Derby, Leicester or Nottingham on 0800 0241 976 or via our online form.