Many Australians are looking for meaningful ways to create a lasting impact beyond their lifetime. One powerful way to do this is to leave a charitable bequest in your will. Whether you want to support causes close to your heart or contribute to future generations, including a charitable gift in your estate plans can transform lives and create positive change.
What Is a Charitable Bequest?
A charitable bequest is a gift made in your valid will to a charity or not for profits organisation. It is a legally binding way to ensure your charitable intentions are honoured after your lifetime. This type of gift can take many forms, including money, property, or other assets, and is distributed as part of your estate.
In Australia, it’s important that the intended organisation is among registered charities with an Australian Business Number and, ideally, Deductible Gift Recipient (DGR) status. This ensures the charity can receive your gift properly and provide sufficient discharge to your estate.
Leaving a gift through a bequest allows your wishes to be carried out accurately, even as circumstances change over time. When drafted correctly with the help of a legal professional or solicitor, your will remains valid and reflects your specific intentions.
Types of Charitable Bequests
There are several types of charitable bequests Australians can include in their wills, depending on their financial situation and goals:
- Specific bequest: This involves leaving a specific sum of money, property, or a particular asset to a charity. For example, you might leave a fixed amount of funds or a piece of real estate for a specific purpose.
- Residuary bequest: A residuary gift is a percentage or the entirety of your estate after other expenses and gifts to loved ones have been distributed. This type of bequest can grow as your estate grows, making it a flexible and popular choice.
- Percentage bequest: You may choose to leave a small percentage of your estate to one or more Australian charities. This allows you to balance your generosity between family and charitable causes.
- Specific purpose bequest: This is where you direct your gift toward a particular program or intended purpose within a charity. It’s important to include wording that ensures the gift can still be used for general purposes if circumstances change or the original purpose is no longer viable.
Each option offers a powerful way to support causes that matter to you, while ensuring your wishes are carried out in a legally valid manner.
Why Leave a Bequest to Charity?
There are many reasons why leaving a charitable bequest is a personal decision for many Australians. One key motivation is the opportunity to create a lasting difference. Charitable bequests help fund vital work carried out by not for profits, enabling them to continue operating longer and supporting communities well into the future.
Another benefit is the potential tax benefits. While Australia does not have inheritance tax, gifting assets to charities with DGR status may reduce capital gains tax obligations within your estate. This means more of your estate can go toward causes you care about, rather than tax liabilities.
Bequests also allow individuals to reflect their values and legacy. Whether you want to support medical research, education, or environmental conservation, your generosity can have a profound impact on lives and future generations.
Additionally, leaving a gift in your will does not affect your finances during your lifetime. You retain full control over your money and assets, and your bequest only takes effect after your passing.
How to Include a Charity in Your Will?
Including a charity in your will is a straightforward process, but it’s important to get professional advice to ensure everything is done correctly:
- Choose your charity: Identify registered charities or organisations aligned with your values. Confirm their DGR status and details such as their Australian Business Number.
- Decide on the type of bequest: Consider whether a specific bequest, residuary bequest, or percentage gift best suits your estate plans and financial situation.
- Consult a legal professional: A solicitor or wills team can help ensure your will is legally valid and includes the correct wording. This step is essential to ensure your wishes are accurately documented.
- Use clear wording: Include the charity’s full legal name and specify your intentions clearly. This avoids confusion and ensures your gift reaches the intended organisation.
- Review your will regularly: As circumstances change, it’s important to update your will so it remains valid and reflects your current wishes.
By following this process, you can confidently leave a charitable bequest that aligns with your goals and values.
Learning how Australians can leave a charitable bequest in their will, highlights just how impactful this act of generosity can be. Whether you choose to leave a specific asset, a percentage, or your entire estate, your contribution can support vital causes and create meaningful change.
Gifts in wills are a powerful way to ensure your legacy lives on. With careful planning, professional advice, and clear intentions, you can make a lasting impact that benefits both your loved ones and the wider community for years to come.
How The Giving Advisory Can Help
At The Giving Advisory, we understand that initiating and maintaining conversations about giving in the family can sometimes be challenging. Our services team is here to help guide your family through the process of family philanthropy, whether you’re starting a donor advised fund, planning your first charitable contribution, or seeking advice on how to align your giving with your family’s values.
If you want to learn more about how to engage your family in giving and create a lasting philanthropic legacy, contact us today. We’re here to help you reach your philanthropic goals and make a positive impact together.