Sometimes, clients wish to gift a portion or the whole of their residuary estate to a charity as an opportunity to continue charitable giving after their death or even to honour the memory of a loved one. Charitable trusts are ‘public trusts’ established for the purpose of the public benefit,[1] which are an exception to the ‘certainty of object’ principle that otherwise applies to express trusts.[2]  A charitable trust can be established within your Will to distribute funds after your death on an ongoing basis, rather than as a lump-sum payment. This means that your gift can be preserved for several years after your death.

There is a deliberate absence of a definition of ‘charitable’ at law, meaning that charitable purposes must be determined on a case-by-case basis. However, statute and common law has recognised that a trust can be for a charitable purpose if it can be categorised for the advancement of health, education, religion, culture or social or public welfare, the promotion or protection of human rights, and any other purposes beneficial to the public.[3] Further, the decision in Aid / Watch Inc v Commissioner of Taxation[4] challenged the aforementioned traditional recognised charitable purposes and established that political purposes (i.e. charitable advocacy) may also be upheld as for a charitable purpose.

Our estate planning solicitors specialise in complex estate planning and are more than happy to discuss your options with you. To see if you should establish a charitable trust in your will or if you would like to speak to one of our specialist estate planning solicitors about any other matters, kindly contact our office.

[1] Attorney General (NSW) Perpetual Trustee Co Ltd (1940) 63 CLR 209.

[2] G E Dal Pont, Equity and Trusts in Australia (Lawbook Co, 7th ed, 2019) [17.95]; see also Morice v Bishop of Durham (1805) 32 ER 656.

[3] Charities Act 2013 (Cth) s 12(1); see also The Commissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531.

[4] Aid / Watch Inc v Commissioner of Taxation (2010) 241 CLR 530.