Leaving a gift to charity in your will is a very personal decision. Many people don’t know what options are available to them, so we have provided answers to some common questions below to help guide you through the process.
What type of gift should I give?
There are three main ways you can leave a gift to charity under the terms of your will:
- Making a specific gift: With this type of gift, you can leave a specific cash amount or other specific asset to one or more charities.
- Gifting a percentage of your estate: With this type of gift, one or more charities would receive a percentage of the residue of your estate.
- Gifting the residue of your estate: With this type of gift, one or more charities would receive what is known as the residue of your estate. This is what is left over after payment of funeral and testamentary expenses, as well as any specific gifts made under your Will.
- Gifting as a contingency or under a reserve provision: Unlike the above, this type of gift will only occur if certain conditions are met, for example if all your primary beneficiaries are no longer alive you can nominate a charity as a reserve beneficiary to prevent a situation of intestacy. There is also peace of mind knowing that in a worst-case scenario, your estate will go to a charity of your choosing.
Can my family contest my will if I leave a gift to charity?
Leaving a part or all of your estate to a charity doesn’t change who may be eligible to contest your estate. As to whether anyone who is eligible can successfully contest your estate, that is all a question of the circumstances. We discuss the possibility of claims with every estate planning client and can talk to you about your personal circumstances and what strategies you might consider to minimise the chances of a successful claim in your estate.
Can I set up my own charity under my will?
It is possible to set up a charitable trust under the terms of your will however the law in this area is quite complex and, in our experience, there are often difficulties in administering estates when charitable trusts are concerned. The cause for this being that terms/conditions of the trust must be contained in your will and there often isn’t enough flexibility to achieve your overall intended purpose and the funds of the trust can end up being wasted on legal expenses rather than your intended charitable purpose. For this reason, we usually recommend that you donate funds to one or more existing charities rather than having a charitable trust created by the terms of your will.
Which charity should I give to?
It is really up to you and your personal preferences to decide which charities you wish to support. This often comes down to your life experience, values and priorities. There is no right or wrong answer and no one can tell you what causes matter to you.
Our team have a strong community focus and commitment and ensure that we support and continually contribute to the communities in which we live. We therefore have significant knowledge of a wide variety of charities which we can discuss with you to assist in understanding what is available based on your personal wishes.
If you require any assistance in relation to the above, or your trust generally, please feel free to contact our Estate Planning team on (02) 4927 2900.
