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A proposed European Commission cross-border inheritance law could open up the door to charities losing not only legacy donations, but potentially other charitable gifts made during a deceased donor’s lifetime.
The Ministry of Justice has opened a consultation on the change which would alter the law so that if an individual dies after moving to another country, the law of their adopted country will apply to their estate, potentially introducing the principle of 'clawback' into legal disputes over into wills.
As per the principle, heirs to a deceased’s estate could demand that any ‘lifetime gift’ be ‘clawed back’ into the estate for redistribution. Under the present law, UK courts do not recognise ‘clawback’ in any disputes over estates, whether the deceased has died in the UK or in a foreign country.
The Institute of Fundraising warns that the law could “lead to a massive loss of revenue” for UK charities.
In a letter to its members, the Institute warned that the loose definition of ‘lifetime gift’ in the consultation document could encompass not only legacies, but “all and any donations made during a person’s lifetime”. It is urging members to voice their opposition to the proposed law during the consultation period, which ends on 2 December, 2009.
The letter warned that “this could mean that the beneficiaries would be able to collect the gifts made by the deceased in his or her own lifetime in order to put them into ‘the pot’ for distribution”.
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Colin Beswick
Head of Finance
Interserve
26 Nov 2009
How can I respond to the consultation on the proposed European 'clawback' law?
Thanks
[Reply]
Celina Ribeiro
Deputy editor
Civil Society
26 Nov 2009
Response to [Colin Beswick]
Hi Colin,
The hyperlink in the story over the word 'consultation' will take you to the consultation document which includes a section on how to reply to the consultation.
[Reply]