Written by James Kelly, Partner Wills and Estates
It is common for individuals to leave a gift to charity in their Will, particularly if they don’t have any family or have an altruistic interest in the work of the charity – such as organisations that work in medical research or animal welfare. While this is a generous and thoughtful action, it can also have unexpected consequences when clients do not properly execute their wishes.
One of the most obvious yet occasionally overlooked elements is to ensure that you accurately identify the correct charity that you wish for this money to be bequeathed to in the Will. It is not uncommon for some charitable organisations to have several charities or charitable funds associated within their brand. Some charities also can be known by one name, but may have an entirely different registered name, so clarity as to where the money should go is key.
If you have donated to this charity in the past then they will most likely have some paperwork (such as a donor receipt) that will verify the correct details. If there is no paperwork then do not despair! The correct name and identifying details will appear on the website of the Australian Charities and Not-for-profits Commission (otherwise referred to as the ACNC) https://www.acnc.gov.au/. The name of the charity should be cited with the ABN for the charity which is also on the ACNC website for clarification’s sake.
What happens if the charity has merged with another charity to form a different legal entity, or even ceased to operate entirely? In this instance, it is good practice for the Will to contain a power for the Executor to apply the bequest to another charity that fulfills the same purpose if the named charity no longer exists. It is important to investigate what activities are conducted by the charity and useful to state a purpose for which the bequest is to be applied. The ACNC website also provides useful information about its charity such as its income and expenditure and who is responsible for the governance of the charity.
It is also important to remember that a family member or other eligible person can contest your Will if you have excluded them and decided to leave a part or all of your estate to charity in your Will. Courts could, in those instances, reduce gifts to charities significantly or remove them altogether in order to make an adequate provision for a person who has been left out of the Will. It is of the utmost importance that you obtain sound legal advice from the Estates department at Owen Hodge Lawyers should you wish to do so.
It is a generous and greathearted act to leave money to charity in your Will. Make sure that you do so correctly to avoid your Estate being contested and your wishes not being carried out. For further information on any of the topics raised in this article, or if you have any questions about your Will or Estate Plan, please don’t hesitate to contact the Estates department at Owen Hodge Lawyers. We are here to help.