NFP Will Beneficiaries? How to Protect Your Interests
2 April 2015 at 11:23 am
As more and more charities and Not for Profits are named as beneficiaries in the Wills of generous Australians, legal expert Andrew Simpson offers his top tips on protecting your organisations interests.
With the increased competition for the bequest dollar in Australia, and the ageing and more affluent population, many more charities and other Not for Profit organisations are being listed as significant beneficiaries in people’s wills.
At the same time, will disputes are becoming more common, especially with the changing nature of Australian households brought about by the rise in de facto relationships and the number of blended families.
Unfortunately, charities and Not for Profit may be seen as an easy target for those challenging a will. This is because the will-maker does not have any personal responsibility to provide for a Not for Profit, unlike the duty they may have to look after a close family member.
The laws that govern wills, trusts and estates are complex and differ across States and Territories. For charities and Not for Profits who find themselves included in people’s wills or involved in will disputes, here are some of my top tips for protecting your interests:
Do’s
1. If your organisation is named as a beneficiary of a will, always insist on seeing a copy of the will and the inventory of assets and liabilities. This ensures you understand the nature of the gift and receive what you are entitled to.
2. Ensure that potential donors know the full and correct name of your organisation to avoid uncertainty when the will is administered.
3. If the estate has a share portfolio and your organisation has a tax deductible fund, seek advice on taking your entitlement in shares not cash. This will potentially save on capital gains tax.
4. If your organisation is to receive a substantial benefit from a disputed will, seek advice about your position and have representation at the mediation.
Don’ts
1. Never accept a cheque from an estate without first verifying how the amount was calculated.
2. Don’t accept an executor’s claim for commission without first being provided with a summary of what the executor has done to justify the claim. An executor’s commission must be proportionate to the functions performed, but sometimes executors seek a sizeable commission for administering a very simple estate.
3. As a beneficiary of a will, don’t regard yourself as an easy target if the will is challenged. Remember, the will-maker included your organisation and wanted you to benefit.
4. Don’t go it alone; if your entitlement is threatened by a challenge to the will, get legal advice early on in the process.
About the author: Andrew Simpson is the principal in charge of the will disputes practice at Maurice Blackburn Lawyers. He has also written a book on wills and estate planning called “You can’t take it with you”.
