When Words Fail...The Importance of Getting it Right at the End.
By: Adam Aptowitzer

It has become increasingly common for charities to broadcast far and wide their desire to be remembered as a beneficiary in the wills of potential donors. Indeed, this method of planned giving can be tremendously helpful to a charity's future operations. (And, it should go without saying that the tax credits generated by such gifts on death can also be an important part of an individual's tax planning). However, the wording of the will must take into account not only the legal name of the charity but it must involve some understanding of the charity's operations as well.

Those familiar with the wording of wills know that great care is often taken to ensure there is no confusion about the beneficiary of a particular gift. For example, a person with only one daughter will not simply state "my daughter" in a will but will often write "my daughter, Jane Doe", even if (in the author's mind) there is no possibility of confusion. With respect to gifts to an organization it is equally critical to ensure that the executors of the will know specifically who is meant and it is therefore important to use the correct legal name of the charity (and perhaps to specify any successor organization as well). That this is important become apparent when considering the situation of church groups.

For example, an individual may have been a member of 'St. Peter's Catholic Church' as a child but eventually have joined 'St.Peter's Anglican Church' as an adult. If the testatrix simply left her legacy to 'St. Peter's' the resulting confusion may result in litigation which could have been avoided if she used the legal name of the organization. (It should be noted that the law in Canada seems to be in some flux as to whether or not a court could look into the mind of the testatrix and guess what she meant).

Of course, this may become more difficult in those provinces which require an organization to choose an operating name different than its legal name (usually where the legal name has already been taken in that province). In some provinces, notably Alberta, the organization may in fact have a different legal name in Alberta than it does in the rest of the country. In these circumstances, a testator may want to go the extra mile in describing the charity by including some other descriptive elements to help make clear exactly which organization is meant.

One other area of potential confusion exists where the donor wishes that the gift be used for a specific purpose. In these cases, the donor's understanding of a term may not be the same as the technical use of the term amongst the professionals who run a particular charity. Take for example the word "acquire" and its use in museums or art galleries. The testator may want his or her legacy to be used by a museum to actually purchase and own some artwork. On the other hand, the museum may understand this term to mean that it is to simply 'gain possession' for the purpose of display on any terms including permanent or temporary loan. Such questions can also lead to request for direction from the courts resulting in an investment of both time and money by the charity.

The lesson to be learned is that charities cannot simply ask donors to remember them in their will but need to also invite potential donors to sit down and understand the importance of wording the gift in a way that meets the wishes of the donor and the needs of the charity.