Aussies give a lot to charity, and we’re proud of it. Giving to charity in your Will is a noble thing to do. Many charities rely on the bequests they get, and many well-known charitable trusts have been established by Wills. These include the Archibald Prize and the Miles Franklin Award. In addition, there are many significant trusts that make cash gifts to various charities.
A charitable trust, unlike an ordinary trust that is set up for particular beneficiaries, is set up for a public purpose. The public purpose of a charitable trust could include:
You can set up trusts in your Will – either a trust for your family, or a trust for charity.
The other way that you can leave money to a charity in your Will is to leave a legacy or gift. This is different from setting up a trust, and is a direct gift to a charity that has already been formed for a specific purpose, such as Guides Dogs, Cancer Council and the Salvation Army.
I recommend leaving a gift directly to a charity in your Will, rather than trying to set up a trust for a charitable purpose.
You need to be careful when selecting a solicitor, and that they understand the different between a gift to charity and a charitable trust. If they accidentally set up a charitable trust for you, when it should have been a gift, then it could fail. For example, you don’t want to accidentally set up a charitable trust for the purpose of someone looking after your pet after you die. This would fail, because the purpose of the trust is not sufficient to form a trust. It is preferable to leave a conditional legacy to someone to take care of the pet instead.
If you want to leave some money for the purpose of funding research for finding a cure for cancer, you are better off finding an established charity that is already dedicated to that purpose, and giving them a gift. Accidentally creating a charitable trust in your Will when the legacy is not big enough could just result in a lot of the money disappearing on fees instead of going toward the true purpose that you want.
If you really want to set up a charitable trust, there are complex requirements that need to be met so that the trust doesn’t fail. Importantly, you also don’t want your charitable trust to fail because requirements aren’t met, and then the legacy falls into your residue under your Will instead of the money being put towards the purpose that you intended.
Please contact me if you want to know more.