A testator may leave their estate to whomever they wish, including to any charitable organisations. However, where an estate is left to a charity instead of family members it is often contested under the family provision regime.
Leaving Your Estate to Charity
There is a societal expectation that a deceased's estate will pass to their closest family members upon their death. Nevertheless, there is no legal requirement that a testator leave their estate to their family, and they may choose to leave their estate, or make a substantial legacy, to a charity.
If you are thinking of making a bequest to charity, be sure to:
- Obtain appropriate legal advice and financial advice.
- Appropriately identify the charitable organisation in your will.
- Consider any requirements of form or purpose of donations imposed by the charity.
Risk of Family Provision
In NSW, eligible persons, including the deceased's spouse or children, may make a family provision application where they have not received adequate provision for their maintenance, education, or advancement in life. A successful family provision will allow the court to redistribute some or all of the money or property left to a charity to the applicant, regardless of the deceased's wishes.
Family provision claims are a common occurrence where an estate is left to charity and are often relatively successful. Although the success of any family provision claim is contingent on the applicant meeting the statutory requirements, the following factors increase an applicant's likelihood of success where the estate is left to charity.
The court tends to be less reluctant to disturb provisions in favour of charities and order provision for dependent family members because, generally, the deceased does not owe any moral obligations to the charity. This is particularly the case where the deceased has no connection to or involvement with the charity.
Charitable organisations often do not participate in family provision proceedings. Consequently, while the court will have regard to the charity's interest in deciding the claim, the charity's failure to proactively seek to protect their interests and to lead any evidence limits the weight which can be placed on their interests.
Some Recent Examples
The deceased's will left the whole of his $570,000 estate to the RSPCA, expressing a specific intention that neither of his children receive any benefit from the estate. The court upheld the deceased's son's family provision claim and awarded him a $160,000 provision.
Here, the executors of the estate had conceded that the son was an eligible person and that provision should be made. In determining the appropriate provision, the court noted the following:
- The son had a moral claim to provision from the estate. However, the amount of the provision should be balanced against the limited father-son relationship and the son's relatively stable financial circumstances.
- While there was a connection between the deceased and the RSPCA, through the deceased's friend and career who volunteered at the charity, this was not a case where there was any strong emotional attachment between the deceased and the charity.
The deceased's estate, valued at $476,688, was willed to the United Grand Lodge of NSW and ACT, aka the Masons. The deceased did not make any provision for his son, Paul, because, as his recorded reasons noted, he did not like Paul's wife, he was critical of Pauls' perceived failure to reach out and assist him, and he was unhappy with Paul's conduct in contesting his younger son's will.
Here, the court recognised that the deceased had had a real and significant connection with the Masons, volunteering as a curator for the Museum for several years and that he had expressed a clear and explainable intention to benefit the Masons. However, while it was accepted that the Masons should receive some provision, Paul had a moral claim on the estate and had modest means of his own. Specifically, he had limited superannuation and was facing some financial uncertainty in light of his pending divorce and property settlement.
Given the above, Paul's family provision claim was upheld, and he was awarded a $286,000 provision.
The deceased's will provided that his 1.8 million-dollar estate was to be divided as follows. A $50,000 legacy to his son, Tomas, two $20,000 provisions and gifts of chattels to pass to other persons, and the residue of the estate to be divided equally between St Vincent's Clinic Foundation and the Royal Flying Doctor Service of Australia.
Tomas' family provision claim was upheld, and it was determined that he should receive an additional $650,000 from the estate. In reaching this decision, the court noted that, while the deceased had displayed an affinity towards the charities during his lifetime, he had a moral duty to make a provision from Tomas despite their tumultuous relationship. This was particularly so given the size of the estate, Tomas' age, and his limited future prospects and negligible asset position.
DISCLAIMER: The information provided above is published for general informational purposes only and is not intended to be nor should it be relied upon as a substitute for legal or other advice.