Are you weighing up whether to leave your money to charity in your will? On the upside, you'll feel good about financially assisting an organisation that likely depends on bequests for its livelihood and longevity.
However, if you’re planning to give a large chunk – or all – of your estate to a charity, you may be neglecting your obligation or moral duty to family members.
Who can be a beneficiary of your will?
There aren’t really any rules around who you can leave your money or assets to in your will. A principle called ‘freedom of testation’ means you can make a will and donate your estate to whomever you choose. However, you’ll want to seriously consider how your choice will impact your family and the other significant people in your life.
Just imagine how your partner, spouse or child would feel if you left them with nothing. Also, they may have a real need for the money or assets you're in a position to provide. By excluding them, you may be forcing them into the uncomfortable – and expensive – position of challenging your will.
I had a case in which the mum passed away, leaving roughly $10,000 to each of her two daughters and the remainder of her estate to a charity. I acted on behalf of the two daughters to challenge the will for further provisions. We argued that they needed the money (which they did). We were successful, though the charity still received quite a significant portion of the estate.
How can you include a charity in your will?
If you want to include a charity in your will, your best bet is to go to a lawyer, get some legal advice and ask the lawyer to prepare a will. Your lawyer will draft the appropriate clauses for including the charity in your will.
Typically, people keen to leave money to a charity feel a strong connection to that organisation. Maybe you volunteered for years at a Salvos store. Or perhaps you – or someone you love – had cancer, so you feel strongly about giving back. Often, it’s a very personal choice.
To make sure you’re donating to a reputable charity, talk to the lawyer who’s drafting your will about how to confirm the charity’s details. You could also look at Pro Bono Australia’s Guide to Giving, which lists recognised charities, so you can do your own homework, too.
There’s a lot to think about when leaving your money to charity. While it’s a great way to support organisations that really need it, you should consider the impact it will have on your family members, and whether they might end up challenging your will.
This article is for general information purposes only; people should seek independent legal advice for their individual circumstances.