Have you considered benefitting a charity in your Will and are not sure how to start?
There are various ways to benefit charities after you have died and the estate planning lawyers at Moores are available to assist. We can help with choosing the most appropriate way to do this, to suit your circumstances and objectives.
Types of charitable giving
Residuary Gift
The simplest way to support your chosen charities is via a gift of a portion of your estate. This portion is calculated once all other specific gifts, expenses and liabilities have been deducted (called your ‘residuary estate’). You may gift your whole residuary estate, or a part or percentage of your residuary estate. This can be split between multiple charities and beneficiaries in your desired proportions.
A residuary gift is an effective way to ensure that the gifts you are leaving to charities flex with the potential increases and decreases of the value of your estate.
Monetary gift
You may nominate a specific sum of money to be distributed to your chosen charity. However, it is important to note that a monetary gift will not change over time according to inflation unless you specifically allow for that in your Will.
There is also a risk that if your estate’s value has reduced over time, the charity’s monetary gift will take priority over any gifts of residual estate you may being providing to other beneficiaries, resulting in your other beneficiaries receiving a lot less of your estate than intended.
Specific gift
A less common, but still valid option is where you gift a specific asset that you own to a charity.
Examples include:
- real estate, like your home or an investment property;
- financial investments, like shareholdings; or
- a gift of personal chattels, like jewellery or artwork.
You must own this asset when you die for this gift to be valid. If you do not own the asset and do not update your Will, there is a possibility that your chosen charity will not receive any benefit from your estate, unless your Will specifically substitutes the gift for, as an example, a monetary gift.
There can also be tax consequences that also need to be considered and should be addressed in your Will, before making a gift of specific assets.
Other options
In some cases, you can nominate a charity as a beneficiary of a life insurance policy however you will need to contact your life insurance fund and/or your financial planner to arrange this. Note that this option is not available for life insurance policies held within superannuation.
If you want to direct any of your superannuation to benefit a chosen charity, this would first require consideration of having a binding death benefit nomination (a separate document) in place to direct your superannuation into your estate, so that the gift in your Will can take effect. There are generally tax consequences that need to be considered and should be addressed in your Will before making such a gift.
How we can help
If you would like to consider your options for making charitable gifts in your Will, our experienced lawyers in the Moores Wills, Estate Planning and Structuring team can assist you with ensuring that your chosen charities benefit in accordance with your wishes.
Contact us
Please contact us for more detailed and tailored help.
Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.