How to include Gifts and Charitable Bequests in your Will as part of your Estate Plan

There are many decisions to be made when preparing a Will as part of your broader estate plan. A few of these decisions include who you would want to appoint as your Executors, who your beneficiaries should be, whether you want to include any gifts of personal property to a particular person, and whether your beneficiaries would benefit from your Wills incorporating Testamentary Trusts (among many other things).

More broadly, a comprehensive Estate Plan should also include a Power of Attorney for financial and personal matters, an Appointment of Medical Treatment Decision Maker document, and Binding Death Benefit Nominations for superannuation entitlements.

However, an often-overlooked part of the Will preparation process is the option to include gifts and/or bequests to charities in your Will.

What is a bequest?

A bequest is a special type of gift contained in a Will. It will only be gifted or paid after the testator (the person who made the Will) has passed away.

When preparing a Will, a bequest can be included as either a gift of a specific item of property, a set cash amount, or a percentage of the Estate.

Common bequests or gifts in Wills can include:

• Leaving a real estate property to a particular family member
• Leaving jewellery or collectibles to a friend
• Leaving a cash gift to a charity

How can I make a bequest?

If you would like to include a bequest in your Will, it is important that you first consider whether you have made adequate provision for the people in your life who you generally have an obligation to provide for. This typically includes any spouse or children you may have, and any person who was financially dependent on you.

If these people are adequately provided for in your Will, and you would like to include a bequest as part of your Will, an estate planning lawyer can include this when drafting your Will. To do so, you must consider which people and/or organisations have been important to you throughout your life, so you can decide how you might like to include them in your Will with a bequest.

For example, if you have a history of making regular donations to a charity close to your heart, then you may wish to include a further cash gift to them in your Will. Alternatively, if you have a particularly close relationship with a niece or nephew, you may wish to leave them a specific item (such as a piece of jewellery or your motor vehicle).

If you decide to include a bequest in your Will to a charity, the charity’s registered details (such as their ABN/ACN and registered business address) must be accurately recorded in your Will to ensure that the correct organisation benefits from the gift. This is one of the many reasons why it can be helpful to have an estate planning lawyer prepare your Will for you, as they will verify this information for you when preparing your Will.

Further, if you are wanting to leave a bequest to a charity in your Will, you should consider how you would like the funds to be applied by the charity. Most people will opt not to specify, thereby allowing the charity to apply the bequeathed funds for their general purposes, and as required, at the point in time that the funds are received. Alternatively, if there is a particular program you wish your funds to be applied to (such as a research initiative or scholarship) then this can be expressed in your Will.

If you do not have sufficient estate assets to both provide for your financial dependents and a charity, you can also consider providing for the charity/charities as an alternative distribution of your estate should one or all of your dependents predecease you.

Depending on the extent and nature of the bequest you wish to leave to a charity in your Will, it may be recommended that a charitable trust be established in your Will to ensure that the purpose and intention of the gift is upheld and administered in accordance with your wishes.

Some people also like to consider gifting during their lifetime, so the charity or person who is intended to receive the bequest can receive the gift sooner (rather than having to wait for the testator to pass away). However, if you decide to gift property or funds during your lifetime, and the bequest is also included in your Will, you should review your Will to decide if the bequest should be removed or otherwise you risk ‘double gifting’ the cash sum or item in question.

Why are bequests important to charities?

Most, if not all, not-for-profits in Australia rely heavily on donations, including bequests, to fund their work in our communities.

Many people feel that the act of leaving a bequest in their Will, which is only paid in the event of their death, is a lovely way to leave an ongoing legacy and continue to support important causes even after they have passed. As such, a Will can be more than a simple document setting out who receives your Estate when you die; it can also be a vehicle for charitable giving and provides the opportunity to leave a lasting impact.

A 2021 study completed by Include a Charity found that[1]:

• Bequests and gifts in Wills make up 25% of income for charities in Australia
• Income generated from gifts in Wills achieves an average return of $28 per $1 invested
• At present, only 11% of Australians over the age of 55 have a charitable bequest in their Will
• It is forecast that bequest income will more than double over the next 20 years, due to changes in societal demographics and Will-making trends

Further, a 2023 report conducted by Include a Charity, which looked at reported data from select charities, identified that[2]:

• 81% of bequests came from people who lived in urban or semi-urban areas
• 61% of testators were known to the charity prior to their passing (i.e., they had previously made donations during their lifetime)
• 64% of bequests were left by women, and 36% left by men (however, both the mean and median gift values left by male testators were higher than those left by female testators)
• 70% of bequests come from people who do not have children
• 7% of bequests received were valued in excess of $500,000
• If someone includes a charitable bequest in their Will, there were (on average) more than 5 charities included

If you want to find out more about your chosen charity’s bequest program, and how they are currently applying funds received from gifts in Wills, we recommend you contact the charity directly. Most organisations will have a bequest program advertised on their website, or a brochure you can access, that they will happily share for your information so you can make an informed decision about your bequest.

How can Coulter Legal help?

At Coulter Legal, we provide tailored and personalised estate planning advice that will ensure your Will reflects your wishes and is legally binding.

If you would like to discuss your estate planning further, please contact us on (03) 5273 5273 to book an initial appointment with one of our specialised Wills, Estates and Succession Planning lawyers, or get the process started anytime of the day or night using our online platform.

[1] A-Fair-Share-for-the-Future-Nudging-the-share-of-an-estate-Whitepaper-2021-FINAL.pdf (includeacharity.com.au)
[2] INCLUDE A CHARITY REPORT