What is a charitable gift in a Will?
Many people choose to leave a gift to a charity in their Will. People may choose to leave a gift to a charity in their Will for various reasons, including to give back to an organisation which supported them throughout their lifetime, or to ensure a charity can continue making a difference in the future.
What can I gift?
A gift to a charity in a Will is commonly known as a “bequest”.
The gift may be a specific asset but more commonly is either a specified amount or a percentage of your estate to the charitable organisation.
The choice is yours, bearing in mind no gift is too small to make a difference. Those who choose to leave a bequest to a charity might like to notify the charity of their decision, as the charity often likes to have the opportunity to thank their prospective donor during their lifetime.
The importance of a cy-pres clause
The term ‘cy-pres’ is a French word meaning ‘as close to as possible’. It is a doctrine that the Court will rely upon to interpret a clause in a Will relating to a charitable gift if the wishes of the Will maker cannot be properly interpreted or legally performed.
In instances where a charitable gift fails (for example because the named charity no longer exists at the time of the testator’s death), the Court may apply the cy-pres doctrine to make an order giving effect to the gift in a manner that most closely aligns with the testator’s intention. For example, the Court could make an order designating the gift to another charity with a similar purpose and objectives to the originally intended charity.
An application to the Court for a cy-pres order can be a costly exercise to the estate and accordingly it is strongly recommended that anyone considering making a charitable gift in their Will have the Will professionally prepared to incorporate terms that would allow the Executor to have similar discretion without the need to make an application to the Court.
A real life example
In the 2019 Supreme Court case of Russell v Attorney General of New South Wales, the deceased gifted 50% of the residue of her estate to be used for research into multiple sclerosis, and the remaining share to the Oprah Angel Network. The Oprah Angel Network ceased to exist when the deceased passed and the Court had to determine whether the gift failed or whether the cy-pres doctrine could be applied and the gift distributed to a charity with a similar purpose.
In that instance, Lindsay J found that “the intended purpose of [the gift] was to provide for the betterment, support and enrichment of women and children in need or for educational purposes”. Lindsay J subsequently held that both the Oprah Winfrey Leadership Academy Foundation scheme and The Young Women’s Christian Association of NSW had similar objectives to the originally intended gift recipient, and applied the gift to these charities instead.
How to make sure your intentions are carried out when leaving a charitable gift?
It is important to have a conversation with your loved ones if you intend to leave a gift to a charity so they are aware of your intentions. In the instance of uncertainty, your loved ones can speak to your genuine intention for the gift to be given to the particular charity.
It is also important to ensure the wording of your Will is wide enough to ensure the gift can cover a situation where the charity may change names, combine with another charity, or cease to exist. To ensure your Will is drafted in this manner, it is important to have your Will drafted by a professional. Our Wills and Estates Planning team at Coleman Greig Lawyers is experienced in this area and are more than happy to make sure that as far as possible your wishes become a reality.
