Leaving your money and assets to a charity – Is it possible? What are the potential consequences?
Are you considering leaving a significant sum of money to a charity in your Will? Whilst you may feel fulfilled knowing you are contributing to a cause that most likely relies on financial assistance for their livelihood, you may be neglecting your obligation and moral duty owed to the members of your family.
Can I leave money to charity in my Will?
The legal principle known as ‘freedom of testation’ allows you to leave your estate to whoever you like. There are (generally) no restrictions to who you leave your money and assets to in your Will, so yes you can. However, it is important to consider that your decision may have a greater impact on your family than you think.
You may think that you are doing the right thing but consider how the significant people in your life would feel knowing that you have left them with nothing, or very little. In my experience, some clients do not particularly care about this factor. They want to leave their estate to a charity out of spite because the spouses or children, “do not deserve” to be left any sum of money or portion of assets. It is my job to advise them that once they have died, these family members may have a real need for money or assets that you are obliged to provide them. If you fail to seriously consider how your decisions will impact your family, you may leave these people with no choice but to challenge your Will. This is not only an unpleasant process, it’s an expensive one that takes time.
A recent case of mine, the mother had passed away leaving over $100,000, being a significant portion of a small estate, to a specific charity and excluded her children entirely. All 4 of her children had significant financial needs. They were forced to challenge to their mother’s Will.
Not only were they devastated to find they were not considered by their mother, they were equally as emotional about the discomfort of seeking to take money from a charity. The children wanted to ensure the charity retained a significant portion of the money but also that they receive a reasonable provision for themselves as the children of the deceased, who really needed it. The children were successful in their claim. If the mother had been my client, I would have strongly advised her to provide for her children in her will.
How do I leave money to a charity in my Will?
If you have a close connection to a particular charity, there are ways you can include them in your Will. If this is something you want to do, you should seek legal advice. Your lawyer can:
- Advise you on the matters discussed above, including your moral duty to provide for your family;
- Advise you on the best way to reduce the risk of a challenge to your Will once you have died;
- Confirm that the charity is reputable and obtain their correct details; and
- Ensure the clause within the Will is drafted appropriately to ensure your wishes are carried out.
There are many factors to consider if you wish to leave your money to charity. It is certainly a very generous way to contribute to charitable organisations that depend on financial assistance, but think about how it will affect your loved ones and if it leaves your Will vulnerable to a challenge.
