Charitable gifts in your Will

Charitable giving can be a meaningful way to leave a lasting legacy and support causes close to your heart. Yet, despite the good intentions, charitable gifts in wills are less common than people might think. While many clients ask about them, only a few ultimately include them in their final estate plan. 

If you’re considering adding a charitable gift to your will, here’s what you should know. 

Why Choose a Charitable Gift? 

Charitable gifts allow you to make a positive impact even after you’re gone. Whether it’s supporting medical research, educational programs, or animal welfare, leaving a portion of your estate to a charity can help sustain causes that matter to you. 

However, it’s important to carefully plan your charitable bequests to ensure your intentions are clearly documented and easily executed. 
 
Types of Charitable Gifts 

1. Specific Gifts 

The most straightforward option is to leave a specific gift—a set amount of money—to a charity because: 

• It sets a clear amount for the charity to receive. 

• It’s often easier to administer and pay out quickly, usually within the first year of estate administration. 

• It avoids complications with residual estate distributions, especially when family provision issues may arise. 

2. Residual Gifts 

This involves leaving a percentage of your residual estate (what remains after all debts, taxes, and other gifts have been settled) to a charity. While this approach works for some, it can become problematic if other beneficiaries feel inadequately provided for. 
 
 
How Much Should You Give? 

The amount you leave to charity depends entirely on your financial situation and priorities. Amounts ranging from $5,000 to $100,000 are common, but there is no minimum limit. The key is to consider your overall estate value and ensure that your loved ones are adequately provided for before committing to a charitable gift. 

If your estate isn’t substantial, consider making a charitable donation during your lifetime. Not only do you get the personal satisfaction of seeing your gift make an impact, but you may also benefit from tax deductions. 
 
Important Considerations for Charitable Gifts 

1. Be Specific 

Clearly identify the charity in your will to avoid confusion. Include the exact name and other identifying details. This ensures that the gift reaches the intended organization and avoids any ambiguity for your executor. 

2. Plan for Overseas Charities 

If your chosen charity is based overseas, special considerations may be required and we will need to discuss whether this is feasible for your estate. 

3. Think About Tax Implications 

Charitable gifts often come with tax benefits for your estate, but these can vary depending on the jurisdiction and type of gift. Consulting a solicitor or financial advisor can help you understand the implications and maximize the benefit for your estate. 

Ready to Add a Charitable Gift to Your Will? 

Including a charitable gift in your will is a wonderful way to make a lasting impact. If you’re ready to take the next step or want to discuss your options, book an appointment on our website or email lidia@viccalaw.com.au.