THE WEIRD CASE OF A PUBLIC-DEBT-WIPING-OFF DONATION

Have you ever thought of dispose all of your personal wealth in favor of the unknown general public instead of those of your close relatives? A man thought so in the early 20th century and all his money went to a fund aim at paying all the UK Public Debt. It was 1928 and a anonymous man made a donation of £308,909 in cash and £160,969 in securities in order to be “retained and accumulated until either alone or with other Funds it was sufficient to discharge the National Debt”. The money was then put in a trust with the scope to invest it until it will match the (then-not-so-immense) Public Debt.

Since then the fund has performed pretty well, increasing assets from £500,000 to nearly £400 million in 2014. But the amount of the fund now is getting problems to Barclay bank, who manages the trust, and they now are asking to give the money away. As a matter of fact, though, the UK Public Debt has reached £1,377 billion, almost 3,500 times the fund. A situation when the fund will be enough to pay out the Public Debt is not likely in the next future.

So, the bank, the attorney general’s office and the Charity Commission are working to change the original objects of the fund. Then any change has  to be approved by a court of law. The legal problem, relating to the certainty of law and the sanctity of the will, is whether it is possible to change the interpretation given to a testament after more than eight decades driven by one objective.

The legal issue.

On one side, kept until today as the valid and driving rule, there is the literal meaning of the will, that subjects the final disposition of the fund to the discharge of the National Debt. If we believe a man’s character is made by the sum of his will and cannot be changed due to different circumstances, the National Fund should stay such.

On the other side, pushed by the trustee, there is the armchair principle which enables circumstances existing when the will was made – in this case, the relative manageable amount of public debt and the impossibility to foresee its growth – to be used to better understand the meaning of the will. This will allow a change in the scope of the trust and in its final disposition.

As always, facts are clear and law is not. We can speculate, until a judge will address this issue, and we will see if the will of a dead man or that of the living ones prevails.