Charitable Giving: How to Include Philanthropy in Your Estate Plan

Planning for the future isn’t just about protecting your loved ones and ensuring financial security. It’s also an opportunity to reflect on the causes and organisations that matter most to you. Including charitable giving in your estate plan is not only a meaningful way to leave a legacy, but also a source of personal fulfilment that makes a difference long after you’re gone.

In Australia, philanthropy is incorporated into your estate plan through your Will, setting up a trust, or donating assets. These options allow you to support the causes close to your heart while potentially offering tax benefits for your estate and beneficiaries. Here’s a simple guide to help you integrate charitable giving into your estate planning process.

Update Your Will

The simplest way to include philanthropy in your Estate Plan is by adding a charitable bequest to your Will. You can leave a fixed sum of money, a percentage of your estate, or specific assets like shares or property to your chosen charity.

It’s essential to make sure your Will is up to date and reflects your current wishes. This process is straightforward and will ensure that your gift reaches the intended organisation without legal complications. If you haven’t reviewed your Will recently, now might be the perfect time to do so.

Set Up a Charitable Trust

A charitable trust is a powerful way to leave a lasting legacy. It allows you to allocate funds or assets to support charitable organisations over time, either during your lifetime or after your death.

There are two main types of charitable trusts to consider:

• Testamentary Trusts: These are created in your Will and take effect after you pass away.

• Inter Vivos Trusts: These are established while you’re alive, allowing you to donate to charities during your lifetime.

Setting up a charitable trust can also provide significant tax benefits. For instance, it can help reduce capital gains tax or other obligations, potentially increasing the amount that goes to your chosen charity. Consulting a legal or financial expert is worth considering ensuring the trust aligns with your goals and to maximise these potential tax benefits.

Donate Superannuation or Life Insurance Proceeds

Did you know you can nominate a charity to receive the proceeds from your superannuation or life insurance? This can be a way to make a significant contribution without placing financial pressure on your estate.

However, the rules surrounding superannuation and life insurance donations can be complex. For example, there may be specific requirements for how these nominations are made, and the tax implications can vary depending on the circumstances. Therefore, it’s crucial to seek advice from a solicitor or financial advisor to ensure the right outcome and to navigate these complexities effectively.

Explore Endowments or Foundations

Consider setting up an endowment or a private foundation to create a long-term impact.

• Endowments involve investing your donation, with the income or interest generated being used to support a charity over time.

• Foundations give you significant control over how funds are distributed and can support various causes for years, giving you a sense of empowerment and influence over your philanthropic impact.

Establishing an endowment or foundation can be more complex than other options, so professional advice is essential.

Communicate Your Wishes

Communication is critical to ensuring your philanthropic intentions are honoured. Make sure your loved ones and estate executors know about your charitable plans. Clear instructions in your Will or trust documents will minimise confusion and help avoid disputes. A simple conversation with your family can go a long way in ensuring your legacy is carried out as you envision it.

Final Thoughts

Including charitable giving in your estate plan is a meaningful way to reflect your values and give back to the community. Whether you leave a bequest in your Will, establish a trust, or donate superannuation proceeds, there are many ways to make a lasting impact.

To integrate philanthropy into your Estate Plan, speak with us today! With the proper guidance, we can create a plan that benefits your loved ones and the causes you care about for generations.