Fabian Ouchterlony is Legacy Administration Manager at the Royal Air Force Benevolent Fund, a charity founded in 1919, which provides lifelong support to serving and ex-serving RAF personnel and their families. The charity’s tailormade approach considers each individual request, with support ranging from provision of mobility aids and provision of suitably adapted housing; to financial grants and counselling.
Legacies contribute over 50% of the charity’s annual income and are its largest fundraising revenue stream.
Having gained the CiCLA qualification in charity legacy administration, Fabian also holds a STEP Advanced Certificate in Administration of Estates (England and Wales) and is working towards achieving a STEP Diploma – something he considers to be the ‘gold standard’.
Recently, Fabian successfully used his knowledge and expertise to challenge a US solicitor who had incorrectly deducted Inheritance Tax (IHT) of US$94,000 from the charity’s residuary share of an estate. He says that even if situations like this only arise occasionally, it shows why a legacy administrator is a tremendous asset to any charity. He explains more:
“Legacy administration is about much more than thanking and banking. An attentive legacy case manager can add a lot to a charity’s annual legacy income.
“This was a case where our charity was left a one seventh net residuary portion of an estate, by a British gentleman who lived in New York. I received the estate accounts and noticed that the IHT had been applied across the board, including our share.
“Non-US charities qualify for Estates Tax Charitable Exemption in the US however, the charitable entitlement amount notified to us was the same amount as for the non-charitable shares. It appeared that the New York attorney administering the estate never claimed our charity exemption from the Internal Revenue Service (IRS), the US tax authorities.
“The New York attorney had deducted IHT of $94,000 from our residuary share, but I contested this. The attorney was insistent that the formulation of the Will clause, setting up the terms of the residuary legacy, meant that IHT was to be deducted from our charity share also.
“They said that they had taken independent advice on this and even sent me the case law that they thought applied which, however, did not appear to support their case.
“I therefore obtained a legal advice letter from a US firm, showing via case law, that the deduction of IHT from our share was in error. I sent it to the New York attorney – we didn’t know if they would accept this advice – but in fact they climbed down and added the $94,000 back into our residuary entitlement. This was obviously a fantastic result and just one example amongst many, of how a legacy administrator can add value.
“Across the board, if you look at the hundreds of legacies that a charity may receive – if, in only a few cases – a charity can do this, then a legacy administrator is a tremendous asset to any charity.
Training
“In practice you are learning all the time, but I feel if I do the STEP qualifications, then it helps me and it means you can be an older person and it’s actually an asset, which is not always the case. This is a job where it is really good to have the experience of years and you can think yes, I dealt with this two years ago…
“I’d say the most interesting part of my job – and I always try to highlight this – is to get the other charity co-beneficiaries involved. When I respond to a solicitor’s notification letter, I will copy in the other charities involved and I’ll suggest to the solicitor that, as there are several charity co-beneficiaries involved, it would be a good idea to email us as a group.
“Solicitors will tend to email all the charities separately, possibly because they are scared they might be breaking GDPR by sharing email addresses in a group email. And you have to make the point that these are your professional email addresses, we’re in contact anyway and we’re all colleagues.
“I like that collaborative aspect. There aren’t many charity roles where every day you are in contact with colleagues in other charities, which is great.
“And, on contentious matters, charities are not shy of instructing solicitors for advice because they are the experts.
“It’s surprising how solicitors (and you can see that in this case) have taken IHT off our charity share and I say, ‘hang about, section 84 of the Inheritance Act…’. Because we’re dealing with charity legacies, we often have a more specialised knowledge than solicitors who are dealing with all sorts of clients and may not deal with charities very much.
Goodwill
“Our legacies tend to come from families linked to the Service, often the older generation, who are very much aware of the Battle of Britain and the Second World War because they grew up with it.”
“The RAF Benevolent Fund is massively dependent on that historical goodwill towards the RAF. The RAF gets little current media exposure whereas with other causes such as cancer everybody unfortunately knows someone who’s been affected by it, so the public are more aware of that issue.”
“The challenge for Services charities and for the RAF Benevolent Fund in particular, from a fundraising perspective, is to widen our appeal to include a younger audience. At the moment, without legacies most of our charity’s work helping veterans and their families would not be possible and therefore it is a crucial source of income.”
