We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Summary - Care needs to be taken for gifts to
charities and not-for-profit entities where an officeholder for the
time is being appointed as executor.
Often Will makers when leaving a substantial gift to a charity
or not-for-profit entity wish to appoint an office holder in the
organization as executor of the Will.
Such an appointment was reviewed in the recent Supreme Court of
South Australia case in the Estate of Chomiak [2012] SASC 27 (29 February 2012).
The deceased, Anna Chomiak, died in 2010, aged 93. Her Will, which
was prepared by a solicitor, nominated the "priest in
charge for the time being of the Ukranian Catholic Church at
Wayville" as her sole executor.
The Registrar of Probates in South Australia questioned whether
the appointment in the Will created what is known as a
"shifting executorship" because the phrase
"for the time being" created uncertainty as to
whether the deceased meant the priest in charge of the Church:
at the time she made her Will;
the date of the deceased's death; or
a person who is in the office but only while that person holds
the office.
The Registrar sought a direction from the Court as to the
validity of the appointment.
A shifting executorship can be invalid, so it is not acceptable
to appoint as an executor the holder "for the time being of a
particular office" where it creates uncertainty, i.e. as to
who is to act as executor.
The applicant for the grant of probate of the deceased's
Will was Father Gorpynyak the priest in charge of the Church at the
deceased's death and was not the priest in charge at the date
of the execution of the Will who was Father Ckuj.
The Court was of the view that the principle of
"shifting executorship" (based mainly in
nineteenth century Australian law) was simply "just a
manifestation of the approach taken to particular circumstances
within the rubic of uncertain appointments, where in the
circumstances the appointment is too uncertain and consequently
void". The Court found that the deceased had been
sufficiently clear and certain in her appointment and upheld the
appointment of the executor in the Will to be valid. The Court
based its decision on the fact that the deceased was a founding
member of the Church, a benefactor and was heavily involved in
Church activities. She was familiar with seeing a variety of
priests during the period from the establishment of the Church to
the date she signed her Will (she had known five priests during
that period). Because she did not specifically name Father Ckuj,
the priest in charge at the date of the Will as her executor, the
Court decided that she intended to appoint the "priest in
charge who holds office when duties of an executor are to be
performed " i.e. on her death.
If the Court had applied the principle of shifting executorship
to Anna Chomiak's Will, the appointment would have been void
and the appropriate grant would have been one of Letters of
Administration with the Will annexed, rather than a Grant of
Probate. Even though the appointment would have been void, the
other terms of the Will would have still been valid.
It is recommended that, to avoid any possible doubt as to the
validity of the appointment of an officeholder as executor and the
need for a Court application as in the Chomiak case, the Will maker
refers to the officeholder, "at the date of my
death" rather than "for the time
being". This is not an issue in respect of bequests to
officeholders for the time being.
As Anna Chomiak left the residue of her estate to the Church,
the Court reviewed whether there were any suspicious circumstances
surrounding the making of the Will. The Court noted that as the
solicitor who had prepared the Will had read it to the deceased
both in English and Ukranian there was a clear inference that the
deceased was happy with the arrangements and the content of the
Will. She was also religiously inclined and devoted to the Church
and no representative of the Church had been involved in the making
of the Will.
The further moral of the case for charities and not-for-profits
is to avoid circumstances arising that may give rise to allegations
of suspicious circumstances surrounding bequests to them in Wills.
This is not an issue where a bequest is unprompted as in the
Chomiak case but care needs to be taken where a bequest is a result
of fundraising activities. Great care should be taken by charities
and not-for-profits to ensure that there can be no suggestion of
coercion or undue influence on the part of the charity or
not-for-profits. The Will maker should meet with his/her solicitor
alone.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
