Property disputes for third sector organisations give new meaning to 'charity begins at home'

In addition, one in five charity supporters aged over 40 say they have included a charitable gift in a will, up from one in seven in 2010, according to research published earlier this year by Remember A Charity, after it surveyed more than 2,000 UK charity supporters.

LCF Law advises both national and regional charities on all areas of The Charities Act and property law, including leases, acquisitions, sales and mergers, and is increasingly representing third sector organisations in disputes about legacies involving property.

Harriet Thornton, head of real estate at LCF Law, said: “Each property transaction, whether it involves negotiating leases, managing ownership disputes or handling property left through legacies, requires careful adherence to both property law and The Charities Act.

“Even seemingly straightforward transactions can require detailed attention to valuations, lease agreements and potential liabilities. For many smaller charities without in-house legal resources, understanding and meeting compliance requirements can feel overwhelming, but it’s essential to maximise the potential of property assets.

“Property disputes are particularly disruptive for charities, especially if they involve contested legacies. These issues drain resources and divert attention from a charity’s core purpose. However, it’s becoming more common for complications to arise when a gift is left to a charity in a will."

Some family members might be fine with you donating a portion of your estate to charity, but others might not.

Under the Inheritance Act, a beneficiary could dispute your will if they believe it didn't make sufficient financial provision for them. They could also argue that you weren't of sound mind or that you were coerced into making the will.

To avoid a painful and expensive legal dispute after your death, think carefully about whether your donation could create rifts within the family.

“With emotions running high, bereaved family members who may feel inadequately provided for or believe the deceased lacked mental capacity at the time of making the will, may contest its validity, which can lead to lengthy and costly court cases,” said Harriet. “Effective conflict resolution supported by specialist legal advice is essential to protect a charity’s reputation and resources.

“We have dealt with lots of these cases in recent years. Often, we will analyse the determining factors, such as the donor’s mental capacity at the time of writing the will, their motivation for leaving the legacy and their obligations towards their family or dependents, to understand the strength of the claim. Depending on its prospects, we help charities make an informed decision as to whether it’s worth defending against.

“In some instances, the executors may hold up the process by procrastinating or being uncooperative. When this happens, we can make an application to court on behalf of the charity to proceed the matter.”

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She added: “In certain cases, property left to a charity in a will, no matter how generous and well-intentioned, may not fit with the organisation’s objectives, work in practice or align with legal requirements.

“Our work also involves helping charities to deal with the donation, considering the organisation’s needs, advising on liabilities and suggesting additional measures where needed, such as a survey or valuation.

"In certain circumstances, where charities are left properties that might be dilapidated, of no use, or with a low value, we might even help them decide that it isn’t in the charity’s best interests to accept the property.”

Based on the number of deaths recorded in 2023 (581,367), Smee & Ford calculated that 6.6 per cent of people in the population of England and Wales mentioned a charitable organisation in their will.

The year also saw the value of charitable estates increase by £1.2bn from £21.4bn to £22.6bn in 2023, a growth of almost seven per cent. This is the second time values have exceeded £20bn and, Smee & Ford noted, is important becase growth in estate values means the values of residual bequests also grow.

LCF Law employs over 145 people across offices in Leeds, Bradford, Harrogate and Ilkley.