Clark Wilson LLP Article

Know your beneficiary

The importance of accurately describing a recipient of a gift

Polly Storey
Clark Wilson LLP

When making a Will, it is important that donors clearly identify the charity they wish to benefit. Any confusion on death about which charity was intended to receive the gift risks embroiling the beneficiary in costly disputes and frustrating a donor’s wishes. This risk is illustrated by a recent decision of the BC Supreme Court.

In Galloway Estate v. British Columbia Society for the Prevention of Cruelty to Animals, (2021 BCSC 413), a question arose about whether an American public broadcasting company was entitled to receive a gift under a Will. The deceased had been a long-time supporter of the American broadcaster, which delivered commercial-free educational and informational programming on air, online, and in person in the United States and Canada. In her Will, the deceased had named the Canadian arm of the organization as a beneficiary. When the gift took effect, however, the Canadian charity no longer existed—by that time, the American broadcasting company had started receiving donations directly.

The BC Attorney General opposed the gift to the American broadcaster, arguing that the Canadian charity had been dissolved and that the American broadcaster was not the successor entity. Instead, the Attorney General said the gift should be distributed to a local charity with similar purposes.

The Court agreed with the American broadcaster, holding that because the Canadian charity had existed solely to issue tax receipts to its Canadian donors, the deceased’s charitable intentions in favour of the specific broadcaster could be fulfilled.

Although Galloway Estate shows that a technicality will not necessarily defeat a donor’s charitable intentions, it also serves as a caution for donors seeking to make a charitable gift. In Galloway Estate, there was uncertainty about the donor’s intention in her Will, requiring the ultimate beneficiary to defend the gift in Court. In giving effect to the gift, the judge emphasized the unique circumstances of the entities involved and the fact that the other charitable beneficiaries did not oppose the gift.

Donors are advised to seek legal assistance when drafting their Wills to make sure that their wishes are clearly expressed and that the organizations they wish to benefit are accurately and thoroughly described. Uncertainty later may lead to expensive litigation, delayed and depleted gifts, and, at worst, a failure of the donor’s intended gift.

Clark Wilson LLP