Prevent a common estate disaster with a disaster clause in your will

You may have heard of the tragic story of Richard Cousins, a British businessman and the chief executive of the world’s largest catering industry company, Compass Group.

Cousins was killed on 31 December 2017 when the light aircraft he was on board crashed into the Hawkesbury River in Australia. His two sons, William Cousins, Edward Cousins, his fiancée Emma Bowden and her daughter Heather Bowden, as well as the pilot, were also killed in the accident.

A year before his death, Cousins had changed his will to include a disaster clause so that if he and his children were to die at the same time, the bulk of his fortune would go to charity. He had nominated Oxfam as his chosen charity and, in consequence of the clause, it is estimated that they will receive a legacy of c£41m. This is a huge amount of money for a charity which in its last annual report for 2016 to 2017, received a total of £19.8m in gifts left through wills.

What is a disaster clause and how useful are they?

A disaster clause is a provision that can be put into an individual’s will that determines where their estate will go if they and their beneficiaries all die at the same time.

Many people prioritise making provision for their immediate and closest family in their wills and they will often leave a legacy to one or more charities, but they do not consider what might happen if there is a tragedy and all their beneficiaries die at once.

Some people might be content for their estate to be left to what can be very distant family members in accordance with the laws of intestacy, others may not, particularly when there is a family dispute.

For those who want to control where their estate might ultimately end up in the event of a disaster, they should consider including a disaster clause in their will. This clause may make provision for any person or entity (including charities) that the testator wishes.

Our advice for dealing with disaster clauses

In our experience, testators will not always want distant family members to benefit and therefore may prefer a disaster clause to benefit their chosen charity instead.

We often advise clients to consider including a disaster clause in their will and such a provision can be a particularly sensible inclusion for families with young children. Disasters are most likely to occur during travel and most families with small children travel together.

A disaster clause essentially makes sure that the will covers all eventualities, which can only be a good thing in a world where contentious probate claims are on the rise.

Fortunately, tragedies that affect entire families are a reasonably rare occurrence, but if a charity does receive a legacy in accordance with a disaster clause, it could be a substantial donation, particularly if they are the sole or major beneficiary under the provision.