It is common for will-makers to make bequests to charitable organizations in their wills. But what if the charity that is named as a beneficiary no longer exists at the date of the will-maker’s death? Over time, charities may be dissolved or cease to exist, change names or structures, or otherwise be replaced by successor organizations. If a will-maker intends to make a charitable bequest, but the charity named in the will no longer exists at their death (or no longer exists in that name or form), what happens?
This issue was recently considered by the B.C. Supreme Court. In Galloway Estate v. British Columbia Society for the Prevention of Cruelty to Animals 2021 BCSC 413, the deceased left shares of her estate to certain charitable organizations “that are in existence as at the date of [her] death,” including “Pacific Coast Public Television Association” (“PCPTA”).
PCPTA was registered as a Canadian charity so that persons could donate to the commercial-free educational channel, KCTS 9, or PBS Channel 9. The problem was that PCPTA (the beneficiary named in the will) was dissolved in 2018, and therefore that particular entity no longer existed at the deceased’s death. KCTS also had changed its name to Cascade Public Media (“CPM”), and CPM continued to operate KCTS 9.
The executor needed directions from the court:
- Does the gift to benefit PBS/KCTS 9 fail because PCPTA no longer exists; or
- Can the PBS gift go to CPM instead?
The court applied the “cy-pres doctrine.” The cy-pres doctrine determines what happens when property that has been dedicated to charitable purposes cannot be applied in the manner intended by the donor. Where the purposes or objects of a charitable trust have become impossible or impracticable to accomplish, the court may intervene and alter the purposes of the trust. The courts may implement modernized or modified objects that are “as near as possible” to the original purposes. The order must depart from the intentions of the settlor only to the extent required to remove the problem.
If it is not impossible or impractical (which the courts interpret broadly) to accomplish the purpose of the charitable trust, then the court cannot intervene.
In Galloway, the court concluded that the gift would go to CPM. The deceased intended to benefit the PBS channel, and CPM was now the entity that performed that role. CPM assumed responsibility for PCPTA’s obligations.
The court distinguished another case, Re Eberwein Estate 2012 BCSC 250. In that case, the deceased made a gift to a charity called “Aid to Animals in Distress,” which she donated to during her lifetime. The charity ceased to exist prior to the deceased making her will and her death. That gift was not subject to the cy-pres document (and the gift failed) because the court was unable to determine an alternative charity to which the gift should go.
If it appears that a specific charitable bequest may fail because the named charity no longer exists, in certain circumstances the court may intervene and give effect to the will-maker’s charitable intention by modifying the will to, for example, make the bequest to a successor charity, or a nearly identical charity.