RSPCA sees legacy halve after losing High Court battle

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RSPCA sees legacy halve after losing High Court battle 4

Fundraising | Vibeka Mair | 17 Feb 2010

The RSPCA has lost a High Court battle over a disputed will worth nearly £1m.

The lost case means the animal welfare charity will get a legacy of £370,153 instead of £651,820.

The dispute centred around the interpretation of George Mason’s will, which divided his estate, worth almost £1m, between the RSPCA, his brother John and two friends, Norman and Patricia Sharp.

The RSPCA argued that Mason’s will was constructed in a way which attempted to avoid all recipients having to pay inheritance tax.

Its case was that he bequeathed a total of £300,000 to friends and family, at the time the maximum that could be left in a will without it being subject to tax; with the residue of the estate going to the RSPCA, which as a charity is exempt from the tax.

However, the other recipients believed he wished to leave them his house on top of the £300,000, bringing the sum total to £469,000 and therefore over the threshold for inheritance tax.

High Court judge Mr Justice Peter Smith agreed with the family’s argument and ordered that the £112,000 tax amount be deducted from RSPCA’s residual sum, leaving it with £370,153. Mason’s brother will receive £66,000, while Mr and Mrs Sharp will get £400,000.

In his ruling the judge said: “The claim was extremely weak and should not have been brought.”

He refused the RSPCA permission to appeal because if the case went to the Court of Appeal it would “cause more concern and stress” to Mason’s bereaved elderly relatives and friends.

If the RSPCA had been successful in its case it would have got £651,820. Mason’s brother would have got £28,820 and the Sharps £271,000.

The RSPCA was unavailable for comment.

Directory: Royal Society for the Prevention of Cruelty to Animals (RSPCA)

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Carl Allen
none
none
23 Feb 2010

The last e-mail seems to assume that elderly donors are there to be taken for a legacy ride. If this approach is characteristic of fundraisers, then a parliamentary enquiry seems to be called for.

[Reply]

Jay Walker
Fundraiser
Personal advisor
23 Feb 2010

Judicial decisions are increasingly leaning in favour of claims of families against charities. Large corporate charities should see that they are now the 'powerful' in these disputes against often elderly or excluded family members. Talks between the parties can be used simply to demonstrate a willingness to compromise to the judge when it comes to trial. Solicitors derive a financial benefit in prolonging and escalating contentious cases. Charities need to be a lot more creative and actually talk directly with families to secure mutual benefits. What elderly occupant of a house wouldn't say 'yes' to a lump sum and a life interest in staying in the property? The charity would just have to wait awhile but would avoid major costs and risk losing money which was intended for them.

[Reply]

Carl Allen
none
none
18 Feb 2010

It is rare for lawyers to give inaccurate legal advice in these matters as the path is well troden. However it is often the case that charity give poor organisational advice, usually because charity advisers are both poorly trained or friends of the governance structure.

Will the Trustees be claiming inaccurate legal advice (in which case they can complain to the appropriate legal oversight body for lawyers) or bad advice from its other advisers (in which case how will other charities know how to avoid)or resign because they will not be able to justify the reasonableness of the decisions to go to court?

[Reply]

Daryl Martin
Charity Adviser
Regis Consultants Ltd
17 Feb 2010

This calls into question the quality of advice that the RSPCA trustees received. I wonder how much they paid their advisers and their lawyers to take them down this dead-end street?

Trustees must remember that they are custodians and stewards of funds entrusted to them. Clearly the lessons of Franklyn Mint and the Princess Diana Memorial Fund have been so soon forgotten.

[Reply]

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