Updated October 2026
Probate Problem 44
Charitable donations in a will can carry considerable emotional and financial weight. A gift may recognise care received from a hospital, support a congregation or continue a lifelong commitment to a cause. Ensuring these bequests are fulfilled involves understanding the will and managing the estate carefully.
In New South Wales, executors must identify the correct recipient, establish what the gift covers and deal with estate liabilities before distributing assets. They should also check tax consequences and any restrictions on how the charity can use the gift. Clear instructions and reliable records help protect the deceased’s wishes.
What is a charitable bequest
A charitable bequest is a gift left through a will for a charitable organisation or purpose. It may be a fixed sum, a particular asset such as shares or real estate, or a percentage of the residuary estate. The residue is what remains after debts, expenses and other gifts have been dealt with.
Read the whole will before deciding what must be transferred. A gift of a property differs from a direction to sell that property and donate the proceeds. A gift for a particular program may also impose restrictions that do not apply to a gift for a charity’s general purposes.
Steps for executors handling charitable gifts
1 Read the will and establish your authority
Locate the final will and any valid amendments, identify the executors and obtain probate where required. List every charitable gift, its recipient, its value or percentage and any conditions. Seek advice if clauses conflict or the wording is unclear before making promises about payment or timing.
2 Confirm the charity’s identity
Check the charity’s full legal name, ABN and current status through the ACNC Charity Register. Compare these details with the will and contact the organisation’s bequests team. A familiar trading name, local branch or fundraising campaign may not identify the legal entity entitled to receive the gift.
The ACNC’s guidance on giving recommends contacting the charity to discuss how a gift can best be made. Confirm who can accept the asset, whether restrictions can be fulfilled and who can issue a receipt. Verify payment instructions directly through independently confirmed contact details before transferring estate funds.
3 Allow for debts and claims before paying gifts
Charitable beneficiaries do not bypass the normal administration process. Legal Aid NSW’s distribution guidance explains that debts must be paid before beneficiaries receive estate assets. Allow for administration expenses and outstanding tax, and obtain advice if there may be a claim against the estate.
Ask about distribution timing and whether to publish a notice of intended distribution. Such notices can provide protection in specified circumstances, but they are not a substitute for addressing known claims. Do not promise a charity an immediate payment simply because probate has been granted.
4 Value assets and confirm whether a sale is appropriate
Executors may need valuations of property, shares or other non-cash gifts. The required valuation depends on the will, the asset and the transaction. Keep supporting documents and obtain professional assistance where a reliable value is needed for a transfer, sale, accounting or tax purpose.
Do not assume that every asset left to charity must be sold. Check the will, the executor’s powers, estate liabilities and the charity’s ability to accept it. Selling an asset can produce different legal and tax consequences from transferring it directly, so resolve those issues before entering a contract.
5 Complete the transfer and keep evidence
Arrange the appropriate transfer documents and obtain written acknowledgment from an authorised recipient. Keep the will, valuations, correspondence, tax advice, settlement statements and receipts with the estate accounts. Record any purpose restriction so that the paperwork accurately reflects the gift the executor was authorised to make.
Christine’s experience with a gift to the Uniting Church
One gift I dealt with, to the Uniting Church Trust, brought home the importance of naming the intended congregation. It’s easy to think that naming the Church is enough. But if you want your gift to support your local congregation, that intention needs to be clear in your will.
In NSW, the formal name is The Uniting Church in Australia Property Trust (NSW). I would also make sure the will identifies the particular congregation and its location, and check the wording against the Church’s requirements. The aim is to make it clear who should receive the gift and which congregation it is intended to benefit.
My advice is to think about what should happen if your congregation closes, moves or merges with another. A carefully drafted alternative can help protect what you’re trying to achieve. If you’re the executor and the wording is unclear, get advice before distributing the gift or choosing a different congregation.
What if the charity has closed or changed its name
A name change does not necessarily mean the gift has failed. First establish whether the same organisation continues or whether a successor can receive it under the will. If the gift cannot operate as intended, legal advice is needed about interpretation or a cy-près scheme, which applies charitable funds as closely as possible to the original charitable intention.
The NSW Government’s charitable trusts guidance explains that, for the Part 4 process it describes, gifts of $500,000 or less may be referred to the Attorney General when they cannot be given as intended. Gifts above that amount require a court application. Whether a charitable trust exists is a threshold question; the appropriate process depends on the circumstances.
A real NSW case involving a nonexistent charity
In Estate of John McGregor Edwards (2023), the will left one-fifth of the residuary estate to the “Aboriginal Children’s Medical Research Trust”, with a reference to Noel Pearson and Cape York. No such organisation existed. The executors sought judicial advice about how to administer the gift.
The Supreme Court of NSW found a general charitable intention and considered competing proposals. It approved a cy-près scheme allowing the gift to pass to Good to Great Schools Australia specifically for research into medical issues relating to Aboriginal children in Cape York.
The decision demonstrates how a court may preserve a charitable purpose despite a problem with the named recipient. It also shows why an executor should obtain advice before redirecting a gift. The Court’s approval was confined to that specific purpose.
Are charitable gifts in wills tax deductible
Australia has no inheritance or estate tax, but a deceased estate may still have income tax and capital gains tax obligations. The Queensland Public Trustee’s estate tax guidance explains why executors need to address tax before final distribution. A charitable beneficiary does not make the entire estate tax exempt.
A testamentary gift is not deductible under the ordinary gift provisions in section 30-15 of the Income Tax Assessment Act 1997 (Cth). Separately, section 118-60 can disregard a capital gain or loss from certain testamentary gifts of property where its conditions are satisfied. That does not automatically exempt an estate’s sale of assets to fund a cash bequest.
Charity registration and deductible gift recipient status are different. Not every registered charity is a DGR, and endorsement may cover only a particular fund. Obtain tax advice on the actual gift and proposed transaction before selling or transferring valuable assets.
What the charity statistics show
The ACNC Australian Charities Report, 12th edition, published in 2026, records $14.8 billion in donations and bequests combined for the 2024 reporting period. Together, they represented 6.2% of charity sector revenue. These national figures show the financial importance of giving, but do not isolate gifts through wills or measure NSW probate disputes.
Help with charitable bequests in NSW
Clear instructions, accurate recipient details and careful administration help charitable gifts reach their intended destination. Review your will when a charity changes its name or structure, and discuss any restrictions or alternative recipients with your solicitor.
Whether you are making a charitable bequest or administering an estate, contact CM Lawyers for assistance with the wording, probate process and distribution arrangements. Bring the will and any charity correspondence so the intended gift can be assessed properly.
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