Out of $190 billion of revenue raised by Australian charities, $13.4 billion come from donations and bequests. While clear motivators behind wanting to leave gifts in your will to charities include sympathy with their causes or a personal involvement in their work, a bequest to charities is also the choice of some testators who feel making gifts to family would only create tension, or that it would be appropriate to make provision for those who are less fortunate. This article explains how you can give a gift to a charity through your will.
If you are thinking about writing your will and would like to make a gift to a charity, it is important that the clause in which you make the gift properly reflects your intention. It is important to consider obtaining financial and tax advice on whether you would obtain more financial benefit by making a gift to a charity during your lifetime.
Some charities have a template clause on their website. For example, the World Wide Fund for Nature is one of those charities, whose template clause is as follows:
"I give to World Wide Fund for Nature Australia ABN 57 001 594 074 free of all taxes and other deductions
*(the residue of my estate /
*a ___% share of my estate /
*other type of legacy eg fixed sum
for its general purposes, and the receipt given on behalf of the World Wide Fund for Nature Australia shall be sufficient discharge to my Trustee."
(* choose one or more of these options)
However, you should also include a clause to cover the scenario where the charity named in your will ceases to exist before the distribution is made. If this happens, the gift could fail and go to an unintended beneficiary. As charities often operate as a network of multiple corporate entities, which can be restructured from time to time, there is a chance the entity you name in your will may have been dissolved by the time you die.
The clearest way of addressing this event, is including words to the effect:
"If at the date of my death [insert name of charity and ABN] has changed its name, has merged with another charity or has ceased to exist, then this gift will not fail, but my executor shall be authorised to direct this gift to the charity delivering the charitable purpose they consider I intend to benefit".
What is most important in this scenario is indicating that you have a general charitable intent. Speak to a solicitor if you wish to make a gift to a charity, as they can assist you in ensuring your charitable intent is clear and honoured upon your death.
There may be capital gains tax advantages where gifts of shares or real property pass in specie ("as is") from the deceased person to a charity which is endorsed as a Deductible Gift Recipient (DGR). It is important to ensure that the charity is named correctly in the will and is endorsed as a DGR.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
