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15 August 2013 Leaving a legacy: Doing charity the right way

By Angela Harvey, Partner and Euge Power, Solicitor


In brief

The idea of leaving a legacy to charity in your will that helps those who are less fortunate is certainly an attractive one. Getting your charitable gifts just right in your will can make things easier for everyone concerned after you have passed away. This article explores the gift (and the style) of giving.


Why give to charity via your will?

If we put aside the obvious concept of karmic realignment, or its portioning out by the cosmos, leaving charitable gifts in your will can be of major benefit to those in need either of a helping hand or to enable charitable organisations to keep helping.
 
Even if a charity is the last in the list of beneficiaries under your will, it can be a masterstroke to leave the residue of your estate to charity. This is because life does not always pan out as we hope. There is the possibility that either some or all of the gifts to your beneficiaries may fail due to one cause or another. This may leave you dying partly or wholly intestate. The outcome of a situation such as this could be none of your wishes being complied with, or delay, expense and inconvenience to those left behind.
 
At Swaab, we work with many charities who have received major and minor testamentary bequests.  It is heart warming to see the difference that such gifts can make.  Indeed, many of the charities that we work with are wholly dependent on philanthropic and charitable gifts, with no Government funding at all.  Without such gifts, much lifesaving work could not be done.

Going to give? Give right

There are several things to get right when you and your lawyer get together to discuss which charity will make it into your will. Some of these issues include:

1. What is the charity's name?
The need to be precise in your will is extremely important to make it as easy as possible for your family going through the process. Is it a charity? Is it incorporated? What is their Australian Business Number? All very important to make sure the gifts go to where you want them to go.

2. Will they accept the gift?
Strange question? Definitely not. For a multitude of business, taxation and independence reasons, charities do not always accept either gifts, gifts over a certain value, or gifts of a certain type.

3. Does it, will it still exist? Trust your executor to give for you.
The time between making the will and the time of the administration of the estate will often be a long time. Therefore it is possible the charity  mentioned in your will no longer exists or has changed its corporate structure or name. Giving your executor to power to select a charity with the objects you find most appealing can help reduce complexity of the administration of your estate.

Make your word final

In an embodiment of the above, below is a general form for a binding gift to charity for a will.

I give to [insert charity name, address and ABN]:
(insert a, b, c, or d)
 
a)          the sum of $............................ (or)
b)          ........................% of my estate (or)
c)          ........................% of the residue of my estate (or)
d)          the rest and residue of my estate
 
to be used by the administration of the [insert name of charity] for general purposes and I direct that the receipt of the Chief Executive Officer of the [insert name of charity] or other apparently authorised body of the [insert name of charity] will be sufficient discharge to my Executor(s) who is/are not bound to see to its application.

Further, if you are minded to give your executor power to select a charity, the below form might be suggested.

If the gift in [insert clause number] cannot take effect completely or at all, to the extent that it cannot take effect: to the charitable organisation or organisations in Australia which my executors in their discretion consider most nearly fulfils or fulfil the objects I intend to benefit in the share or shares my executor(s) think fit

With the above in mind, make sure you speak to your lawyer when writing a will. Everyone wants to make sure your last requests are honoured, and professional drafting will help make your final word final.

For further information, please contact:

Angela Harvey, Partner  |  Phone: +61 2 9233 5544  |  Email: axh@swaab.com.au

If you would like to republish this article, it is generally approved, but prior to doing so please contact the Marketing team at marketing@swaab.com.au

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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