How to leave a charitable gift in your will
Charitable bequests are a meaningful way to extend your values beyond your lifetime. Here's how to draft them effectively.
A charitable bequest is a gift in your will to a registered charity. You can leave a fixed amount, a percentage of your estate (a residuary share), or a specific asset. Charitable bequests in Australia are generally exempt from capital gains tax and can simplify estate administration.
Types of charitable bequests
Specific cash bequest (e.g. $50,000 to charity). Specific asset bequest (e.g. a property to a charity). Residuary bequest (a percentage of what’s left after specific gifts). Conditional bequest (charity receives if certain conditions met). Substitutional bequest (charity receives only if named primary beneficiaries don’t survive).
Identifying the charity correctly
Use the charity’s full registered name (per the ACNC register), ABN, and a brief identifying description. Vague gifts (“to a charity for cancer research”) create uncertainty and disputes. Specific naming prevents this.
Substitute clauses
Charities can wind up. A substitute clause directs the gift to a similar charity if the named one no longer exists. Without one, the gift may fail and fall into the residue.
Tax effectiveness
Charitable bequests are generally exempt from CGT under the Income Tax Assessment Act 1997 (Cth). For very large estates, charitable bequests can also help with estate-administration tax planning.
Letter of wishes
A non-binding letter to your executor can express how you’d like the charity to use the gift. The charity isn’t legally bound but most respect well-articulated wishes from major donors.
Summary
Charitable bequests are a meaningful way to extend your values beyond your lifetime. Here’s how to draft them effectively.
Talk to Sam about your situation
If this article raised questions for your own circumstances, Sam Michele offers free 20-minute initial consultations. Learn more about our gifts in wills work, or book a consultation.
Related reading
- Tax benefits of charitable bequests in Australia
- How to leave specific gifts to family and friends
- Gifts in wills