Updated 4 November 2026
CM Law's Ultimate List: The top 50 FAQs on Administration of Estates #43: Manage Charitable Bequests
A charitable bequest can support a cause long after someone dies. The executor’s task is to give effect to the will, establish the correct recipient and protect the estate while debts and claims are resolved. Difficulties arise when a charity changes name, closes or cannot fulfil the purpose specified in the gift.
What is a charitable bequest?
A charitable bequest is a gift made by will to a charity or for charitable purposes. It may involve money, particular property, a percentage of the estate or its residue. The executor must read the actual wording: the type of gift affects its value, administration and what happens if difficulties arise.
The residue is what remains after the estate’s liabilities, expenses and other gifts have been dealt with. A charity receiving a fixed sum has a different entitlement from one receiving half the residue. Avoid promising an amount before that distinction is clear.
What should an executor check in the will?
Read the entire will and any valid codicils, including the charity’s description, the property gifted, any conditions and any substitute recipient. Check who may give a receipt and whether the executor has discretion. A general administrative power should not be assumed to authorise changing the deceased’s chosen beneficiary or purpose.
Create a short schedule quoting the relevant clause for your solicitor and recording the information needed to implement it. If the will uses an outdated name or describes a cause without naming an organisation, obtain advice about interpretation before making contact with possible recipients.
Can the family ask the executor to redirect the gift?
Family members cannot simply replace a valid charitable bequest with their preferred use of the money. The executor must administer the estate according to the will and law. A dispute, proposed settlement or change of beneficiary requires legal advice, particularly where charitable interests, minors or people lacking capacity are involved.
Relatives may choose to donate their own inheritance after receiving it, but that is different from instructing the executor to disregard the will. Keep the charitable entitlement separate from discussions about how family beneficiaries intend to use their own shares.
How can the correct charity be identified?
Check the organisation’s full legal name, Australian Business Number, registration details and contact information against the will and available records. The ACNC Charity Register is a useful starting point for Australian registered charities. A similar trading name or shared cause does not establish that an organisation is the intended beneficiary.
The ACNC’s donating guidance explains the information available on its register. Ask the charity for evidence of any name change or succession. Where an organisation is overseas or absent from the register, investigate its legal identity rather than assuming the gift fails.
What if the charity has merged or closed?
A name change, merger or closure requires investigation of the organisation and the gift’s wording. It does not automatically mean the executor can pay a replacement charity or return the money to the family. Obtain historical records and advice about whether the intended recipient still exists or a legal scheme is required.
Keep correspondence from the former organisation, any successor and relevant regulators. A successor’s assertion that it should receive all earlier bequests is not enough by itself. Identify the legal basis for payment before releasing the estate’s money or property.
What does applying a gift cy-près mean?
Cy-près allows charitable property, in appropriate circumstances, to be applied to a purpose sufficiently close to the original charitable intention when the original arrangements cannot operate. It requires a legal basis and an authorised process. Executors should not select a different charity themselves merely because its work appears broadly similar.
NSW Communities and Justice explains applications concerning failed charitable gifts. Its guidance directs relevant applications involving gifts of $500,000 or less to the Attorney General; gifts above that amount require application to the Court. The gift’s structure and statutory requirements still matter.
What does a real NSW charitable bequest case show?
In Estate Polykarpou; Re a charity [2016] NSWSC 409, a will left half the residue to Oprah’s Angel Network, which had ceased to exist before the deceased died. The Supreme Court found a valid charitable trust and ordered the property applied cy-près, referring the scheme’s establishment to the Attorney General.
The Court interpreted the will as a whole and found a general charitable intention. It did not simply allow the executor to choose any new charity. The practical lesson is to investigate a failed recipient and obtain authority before deciding where its gift should go.
What if the gift has restrictions on its use?
Identify whether the will imposes a binding condition, creates a trust or merely expresses a preference. Discuss the requirement with the charity before payment and obtain written confirmation of its ability to comply. If the purpose is impossible or unclear, seek advice rather than ignoring it or negotiating an unauthorised substitute.
For example, a gift for a named research project needs closer examination if that project has ended. Ask for the documents explaining the change and whether the broader purpose remains achievable. The answer depends on the will, not solely on the charity’s preference.
What happens if the estate cannot pay every gift?
Establish the estate’s assets, debts, expenses and tax position before confirming what is available for charitable gifts. If funds are insufficient, legal rules and the will determine how gifts are reduced or fail. The executor cannot favour a charity or family member simply because one presses harder for immediate payment.
Obtain advice about the order of payment and any need to sell assets. A fixed cash bequest may require different treatment from a gift of an identified asset. Do not use an estimated property value as though it were cash available in the estate account.
Can a family provision claim affect the bequest?
An eligible person may seek family provision from a NSW estate, including one benefiting charities. An application generally must be made within twelve months after death, although the Court may permit late filing or the parties may consent. A charitable gift is not automatically cancelled by a claim, but distribution requires careful consideration of known disputes.
The Law Society’s estate administration resources provide guidance on estate obligations. Tell your solicitor about threatened claims and provide the relevant correspondence. Keep the charity informed of material delays without predicting what the Court will decide or disclosing unnecessary private information.
Is a charitable bequest automatically tax deductible?
No. A gift made under a will should not be treated like an ordinary lifetime donation. Section 30-15(2) of the Income Tax Assessment Act 1997 excludes testamentary gifts from the deduction available under that section. Obtain specific tax advice, particularly where shares, land or other assets are being transferred or sold.
The tax legislation and ACNC’s explanation of deductible gift recipient status address different questions. Charity registration and DGR endorsement are not interchangeable. A receipt proves payment; it does not by itself create a deduction or settle capital gains tax consequences.
How should the executor make and document payment?
Confirm the recipient’s authority to accept the gift, verify payment details independently and retain a receipt identifying the estate and bequest. For property, complete the appropriate transfer documents and record its treatment in the estate accounts. The receipt should come from the person or office authorised under the will or applicable arrangements.
Do not accept changed bank details solely by email. Scamwatch recommends checking payment instructions through an independently sourced contact. Keep the verification record, the charity’s acknowledgement and any conditions attached to the transfer together so the transaction can later be explained.
Do charitable gifts affect the duty to file accounts?
They can. Section 85 of the Probate and Administration Act 1898 requires verified accounts in specified circumstances, including where the whole or a substantial part of the estate passes to charities or public benevolent institutions. Filing accounts and having the Court pass them are distinct steps, with different requirements and consequences.
Check the Supreme Court’s accounts guidance early. An estate substantially benefiting charity should not be treated as though informal receipts automatically complete every obligation. Where filing is required, the ordinary timeframe is twelve months from the grant, subject to extension or other court orders.
When is it safe to distribute a charitable bequest?
Distribution depends on the estate’s liabilities, claims, available assets and the particular gift. An optional notice of intended distribution can provide conditional protection for certain unknown claims. It does not remove known problems or make six months an automatic completion date. Obtain advice before an early payment or distribution during a dispute.
The Supreme Court’s notice guidance explains the conditions, including distribution at least six months after death and after the notice period of at least thirty days. Those conditions are separate from the usual twelve-month family provision application period. Keep an adequate reserve for unresolved expenses.
What is Christine’s practical recommendation?
My recommendation is to verify three matters before paying a charitable bequest: the correct recipient, the precise obligation in the will and the estate’s ability to distribute safely. Obtain advice early if any of these is uncertain. A clear record of those checks helps preserve both the charitable intention and the executor’s position.
CM Lawyers assists executors with estate administration, charitable gift interpretation and distribution questions. Contact Christine Manolakos on (02) 9557 9000 or email lawyers@cmlaw.com.au. Bring the will, grant if available, charity correspondence and current estate accounts so we can identify the next steps.
General information about NSW law as at 4 November 2026, not legal or financial advice. The reported judgment is a real decision; its outcome depends on its facts. Obtain advice about the particular estate before acting.
Key resources
