Pauline Wippell died in 2013 leaving a recently executed will and a letter of wishes. The defendant in the case was an executrix of the will and trustee of the residuary estate. The claimants in the case were the remaining three executors (two of whom were also trustees).
The will stated that, after payment of specific legacies, the residuary estate, including land and property in Cornwall, should be "placed in trust free of tax to be called The Jepson-Hearn Charity Trust fund for people with severe facial disfigurement" and administered in accordance with a letter of wishes.
The letter of wishes also stated that the defendant "may" receive £95,000 from the charity/trust fund if she was widowed "if there is (sic) sufficient funds" and "may" also receive the £95,000 if she divorced, subject to repayment if she remarried her husband.
Following the testatrix's death, two charities were registered with the Charity Commission: The Jepson-Hearn Charity Will Trust (the Trust) and a CIO of similar name. The intention was that the Trust would receive the estate and then transfer it to the CIO, which would be the active charity going forward.
The will required decisions of the trustees to be unanimous.
The defendant was not appointed as trustee of either charity and refused to agree to the transfer of the residuary estate to the trust.
She further argued that she had an enforceable legacy of £95,000 and that this issue should be resolved prior to the transfer.
The result was that the administration was frustrated and the trust could not receive the money and begin applying it for charitable purposes.
The claimants applied to court for assistance.
The court found that the letter of wishes was incorporated into the will because the will referred to the letter, they bore the same dates and the language used pointed towards incorporation, including referring to the letter as an "attachment" to the will.
However, the court held that the defendant was not entitled to a legacy of £95,000.
It was not clear what would happen if there were not "sufficient funds" and the letter stated that the defendant only "may" receive the money.
The court found that the residuary estate should be transferred to the trust and that the defendant should be removed as executrix and not be a trustee of either charity. The court was critical of her refusal to agree to the transfer, suggesting that she had unacceptably put her personal interest in the £95,000 above her duties as executor and trustee and the interests of the charities and their beneficiaries, a conflict which had been specifically pointed out to her by the Charity Commission.
- When preparing a letter of wishes, the will should explicitly state whether this is intended to form part of the will or to be used merely as a guide to its interpretation.
- If a gift is to be a definite legacy, it should be stated as such and expressions such as 'if' and 'may' should be avoided.
- When a will establishes a charitable trust, it is important to consider whether anyone appointed as trustee of that trust has a conflict of interest in relation to it.
It may become difficult, if not impossible, for a conflicted trustee to disassociate themselves from their personal interest in the trust fund, leading to difficulties such as in the present case.
It is preferable for a will creating a charitable will trust to appoint trustees who do not have any interest in respect of the trust fund.