New legacy notification service for charities

HM Courts & Tribunals Service (“HMCTS”) has announced plans to set up a new system to notify charities of legacies left to them in wills, and to end its current arrangements with Smee & Ford.

The importance of legacies, and knowing about them

Legacies are a very important source of charitable income. Legacy Foresight published its latest figures on charitable legacies in November last year, which showed the public donated £2.96 billion to good causes in 2017 by means of legacies, and predicted that figure would grow to £3.4 billion by 2022.

Therefore, a large number of charities have previously signed up to the paid-for notification service provided by Smee & Ford, as this can provide certain key information about a charitable gift in a Will to the charity recipient of such a legacy – such as the amount, the names of the executors of the Will, and whether a Grant of Probate has been issued.

Often, this information is provided to charities by the executors of a Will after the death of the donor, but this does not always happen.

In such cases, the information provided by Smee & Ford can help charities to take appropriate steps to ensure receipt of a legacy in respect of which they have received a notification, where necessary, and allow trustees to ensure they fulfil their legal duty to safeguard assets of the charity.

Why the change?

The precise reason for the termination of HMCTS’ arrangement with Smee & Ford is unclear. However, in an open letter to all affected charities, HMCTS’ chief executive Susan Acland-Hood said:

“While this [arrangement] was established in good faith, we have since found that it is not consistent with the department’s legal duties, and, with the help of charities themselves, we want to design new arrangements for the future.”

How will the new arrangements be designed?

HMCTS has confirmed that a working group will be formed, with the Association of Chief Executives of Voluntary Organisations (ACEVO), the National Council for Voluntary Organisations (NCVO), the Institute of Fundraising, and the Institute of Legacy Management invited to join this. The involvement of sector bodies in designing of the new notification system is promising.

HMCTS has also said that the views of Smee & Ford on the new proposals will be sought and confirmed that it will continue “to work closely with Smee & Ford to seek to ensure that there is as little disruption as possible arising out of these changes over the six months’ notice period”. It has also expressed the wish to reassure charities it aims to create an “arrangement that works for charities”.

What might the new system look like? 

Without knowing the specific legal duties of HMCTS with which the existing system was in conflict, it is hard to know what changes charities may see, both in terms of the operation of any new system, and the information charities receive under that system.

However, given the importance of legacy income, and the short timeframe of 6 months in which to put the new system in place, this is definitely a process to which many charities will want to pay close attention.

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