Gifts in Wills
What is meant by leaving a ‘Gift in your Will’ and who can do it?
A Will is a legal document that sets out what the individual would like to happen to their assets when they die. Writing a Will is about stating where to direct the assets in your Estate (Estate is all your assets and liabilities). Assets include physical (property, car, jewellery, etc), financial (shares, bank accounts, etc), and personal, sentimental possessions.
Those nominated to receive your assets are called beneficiaries, most commonly family members and other loved ones. But assets can also be directed to charities and other not-for-profits.
Anyone can leave a gift in their Will. It doesn’t matter if you have been a regular donor to charity throughout your life or if you are giving for the first time.
A Will is a unique opportunity to share wealth with others that you care about. It is also a good opportunity to learn more about organisations working towards creating positive outcomes for society, environment and the wider world.
Steps to generating a ‘Gift in your Will’
Leaving a gift in your Will to a charity and/or not-for-profit is a similar process to nominating other beneficiaries, with a few additional steps:
- Stating your intentions: it can be helpful to explain why you would like to make this gift (why it is important to you) as well as to which organisation and how you would like the gift to be used. You can set conditions (which may or may not be legally binding) indicating how the gift can be used and any contingencies if circumstances change, such as if the charity ceases operating or operates under a different organisation. The steps may include:
- Explaining why you chose the charity/not-for-profit
- Indictating how the gift should be used (the conditions may or may not be legally binding)
- Specific details about where the assets should be directed if the organisation is no longer operating / has changed when your Will is to be executed.
- You may wish to nominate a Trustee who is responsible for directing the gift distributions and controlling all governance, compliance, investments and giving strategies. More information can be found here on the Philanthropy website and here on the Australian Tax Office website.
- Include specific details such as the name, address and ABN. This will help correctly identify the charity/not-for-profit.
- Specify the details of the gift whether as a specific sum (Pecuniary or Specific), a percentage of your Estate (Percentage or Fractional), the remainder of your Estate (Residual), and property and/or goods. The whole of the Estate may also be specified.
- Notifying the charity and/or not-for-profit that they are named as a beneficiary in your Will is an important step to ensure the organisation can prepare for the time when your Will is executed.
- Broadly, beneficiaries have the right to be informed that they have been included in your Will, their entitlements, be made aware of any claims made on the estate, and are entitled to receive their entitlements in a reasonable period of time.
Information about Executors
How to choose an Executor
The Executor’s role is to carry out the directions in your Will.
It is common to select your spouse or a family member to take on the responsibility of being the Executor. You may need to make contingencies and select other Executors in case your first nomination is unable to complete the duties (for example, if they pass away).
Including the Executor in your Will in the process of writing your Will helps inform them of your wishes, especially when it comes to gifting to charities and not-for-profits. This will also help them understand your wishes, making the whole process run more smoothly.
What do I do if I am an Executor of a Will?
The Executor’s role is to carry out the directions in the Will and applying for the Grant of Probate (confirm the Will is valid) through the Probate Office of the Supreme Court in your State or Territory.
The process involved in being an Executor where the Will includes gifts to charities and/or not-for-profits is similar to the process for other Wills. The main differences are:
- Notifying the charities and/or not-profits. Notifying earlier such as when the Will was written can make the process easier.
- Distributing the assets to the charity and/or not-for-profit to the intended organisation within a reasonable about of time. Ensuring there are specific details in the Will like the charity name, address and ABN will help identify the organisation.
- In the cases where the charity/not-for-profit organisation has changed or is no longer operating (wound up, merged, etc) referring to the statement of intent in the Will (explaining why the charity/not-profit was selected) can be helpful in resolving these issues.
A solicitor can assist you in this role (usually charging fees). Documenting your records (tasks, transactions, emails, phone calls, etc) as accurately as possible will help ensure the Executor process runs smoothly and avoids potential administration issues.
The ATO provides a checklist for Executors here and more information about deceased estates here.
Disclaimer
This publication is a general guide only. It does not take into account your specific circumstances and is not a substitute for professional advice. No person should act upon or in reliance upon it without first obtaining advice from an appropriate qualified professional adviser. Philanthropy Australia is not responsible for any actions taken by, or losses suffered by, any person on the basis of, or in reliance upon, any information in this publication, nor for any omission or error in this publication.
Without limiting the generality of the above, the publisher, and the authors, consultants and editors of this publication, expressly disclaim all and any liability and responsibility to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication.
Where can I get more information?
- Most charities provide guidance on how to leave a Gift in your Will. This information may be found on their website or by contacting the charity directly.
- The Fundraising Institute of Australia (FIA) led campaign, Include a Charity, provides educational resources about leaving a Gift in a Will.
- The Australian Charities and Not-for-Profits Commission (ACNC) is the Australian Regulator for charities. They maintain a comprehensive dataset on registered charities and charitable programs which can be browsed online: Charity Register.
- The Australian Tax Office (ATO) provides information and checklists on deceased estates, for beneficiaries and for Executors.
- Philanthropy Australia provides other free introductory ‘how to’ guide on their website including:
- Professional Adviser Guide to Giving (financial CPD accredited)
- For Professional Advisers
- Professional adviser members and services that lists some Philanthropy Australia members who provide professional advisory services – such as setting up a giving structure or managing investments.