Leaving a charitable gift in your Will is an opportunity to create a lasting legacy.

In recent years, there have been several examples in the media of charities receiving generous gifts from estates.

In the media lately, Children’s Hospital Foundation and Foundation for National Parks & Wildlife received circa $1.4 million in sale proceeds of an estate property gifted to them in a Will.

Whilst this a great example of a successful gift to a charity, there are a number of issues that can arise if your charity beneficiaries are not precisely identified in your Will.

Types of charitable gifts you can leave

Specific gift

This may be a fixed sum of money or a particular item such as property or shares.

For example, if you wished to gift $100,000 to the Children’s Hospital Foundation and Foundation for National Parks & Wildlife, then the Will should be clear on whether the costs of transfer are met from the gift, or the estate generally.

Residual gift

A residuary gift is a gift that forms part of the remainder of your estate, after all gifts and expenses have been paid.

The gift can be all or part of the balance of the estate. However, if it is a part of the balance of your estate, it is important that your Will clearly articulates what part of the balance of your estate the charity or charities will receive, acknowledge that the balance must add up to an evenly distributable number (10 parts, 100 parts etc.).

How to do it properly

If you are thinking about leaving a gift to charity, it is important to take care in how such bequests are set out in your Will.

For instance, when naming a charity in your Will, you should:

• use the full legal name of the charity, with its ABN or ACN – always check the Australian Securities and Investment Commission register for these legal details and contact the charity to confirm the entity particulars are correct; 
• note the business address or registered office of the charity;
• the purpose of the gift, whether the gift is made for ‘general purposes’ (best direction, as it allows flexibility) or for a specific purpose, however, this would limit the charity’s ability to use the funds; and
• contact the charity to obtain their preferred wording.

It is also important to:

• ensure your Will is valid and up to date;
• notify your family of your intentions, to reduce surprises or misunderstandings later;
• do your homework on the nominated charity to ensure it reflects your values; and
• seek advice from a specialist solicitor for property drafting and compliance.

Why talk to a specialist for gifts to charities in your Will?

In the instance where the terms of a Will are ambiguous or the deceased’s intentions are not clear or there is a change of name of the charity, amalgamation or if the charity ceases to exist at the date of passing, a Cy Pres application may be warranted.

The French term “cy-près” means “as near as possible”. There is a provision under the Trusts Act 1973 which grants the court powers in instances where the original purpose cannot be carried out. Accordingly, the court alters the original purpose to allow for the property gifted under the Will to be applied ‘cy pres’.

A Cy Pres application is complex, expensive (sometimes outweighing the gift) and requires significant amount of evidence to be brought before the courts. Therefore, to best avoid such applications, it is important to seek advice from experienced wills and estates solicitors to minimise the risk and account for any contingencies that may arise.

If you require any assistance with the drafting of your Will, or a gift to a charity, please do not hesitate to contact us.