A gift to a charity by will can be accomplished in a number of ways.

The gift can be of a specific sum, a specific property, or a share of your estate. A specific charity can be nominated, or alternatively, a particular charitable purpose that allows your executor to select the beneficiary organisation best suited to deliver the testator’s charitable objectives.

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An additional consideration, common to all such bequests, is whether to direct the gift to the charity absolutely or instead whether the gift should be held on trust by the charity and the income derived applied to its charitable purposes.

The latter course can be attractive to will makers or others who establish them as charitable trusts can go on “in perpetuity”, ie they are not required to “vest” or end within a set timeframe as is required of all other trusts.

Such perpetual charitable trusts allow the benefactor’s name to live on long after they have gone, and their name is often a prominent part of the trust and its work – think Archibald Prize, or Miles Franklin literary award.

The Queensland Supreme Court has recently had to consider the terms of charitable gifts provided for in two separate wills and determine whether those gifts were absolute and could be applied by the charities as they saw fit, or instead had to be held on trust separately to the charities’ own assets and be dealt with accordingly.

The estate of Edwin Marsden Tooth, who died more than 60 years ago in May 1957, involves a trust of the residue of the estate where  the trustees were directed to pay ten percent of the residue of the estate to the Anglican Church “for the purpose of establishing within the Diocese a home for Aged Persons to be described as ‘The Edwin Marsden Tooth Memorial Home’”.

The Edwin Marsden Tooth Memorial Home was established because of the gift, but the gift alone was not sufficient and government grants, other legacies and other gifts were used to help build and later extend the home which is located in Manly in Brisbane, and is still operating under that name.

Justice Glenn Martin had to consider whether this gift was absolute or subject to a trust.

The Attorney-General appeared as contradictor and argued that the gift was a trust as it was established for a purpose that was ongoing.

His Honour did not accept that argument. Instead he found – as contended for by the church – that the purpose set out of establishing a home for aged persons was not a condition imposing a trust, but merely stated a wish that – rather than being binding – was merely “precatory”.

A trust of the residue had been clearly established, but there was no similar clear intention for the payment of this or other shares of the residue to be held on trust.

In addition, the direction in the will was to “pay” the ten percent share to the church rather than for the church to hold it; and was a payment without any condition imposed on it.

Justice Martin thus ruled in favour of the church that the gift was an absolute one.

By contrast, the will of Miriam Norah Lawrence made in May 2008, gifted the entire residue of her estate to the Royal Brisbane & Women’s Hospital Foundation (as it is now known) “to hold on trust in perpetuity as ‘The Len and Miriam Lawrence Charitable Trust’” with the net income “to be applied for the general charitable purposes of the Foundation”.

The residue was substantial, consisting initially of shares and property worth in excess of $4.5 million.

Justice David Boddice noted that the normal rule that applies to perpetual gifts of income from the residue of the estate is that such a gift normally carries with it an absolute gift in the capital of the fund, unless a contrary intention is expressed.

He considered that – when considered in its entirety  – the terms of the gift supported a view that the contrary intention had been expressed ie, the will maker “did not intend the applicant to take anything more than the income”. The applicant was the Foundation.

His Honour observed that:

  • The gift was not to the Foundation directly, rather it was to be held “on trust in perpetuity”.
  • The trust was named in the Will (“The Len and Miriam Lawrence Charitable Trust”), consistent with an intention for the trust to last as a memorial.
  • Terms were included in the gift that showed there was an ongoing administration required of the gift, inconsistent with an absolute gift. These were terms that were seen as more than mere wishes, in contrast to the terms of the Will of Edwin Tooth noted above.

Justice Boddice for these reasons held that the gift was a charitable trust, and not an absolute gift. As a result the Foundation will need to maintain the trust as a separate fund and only use the income.

The Anglican Church on the other hand can deal with the Edwin Marsden Tooth Memorial Home as they see fit, unfettered by the will from which the funds were derived.

Re the Will of Edwin Marsden Tooth; Ex parte Corporation of the Synod of the Diocese of Brisbane [2020] QSC 214 Martin J 22 July 2020

Royal Brisbane and Women’s Hospital Foundation v Attorney-General for the State of Queensland [2020] QSC 222 Boddice J 16 July 2020