Even modest sums such as $1,000 really count for charities. If everyone left a small percentage of their legacy to good causes, charities could do a whole lot more good work.
About 50% of Kiwis have a will, and more should. It would save a lot of angst when people die, and ensure their money, be that a lot or a little, goes to the people and causes of their choice.
Public Trust chief executive Glenys Talivai said it’s not just the wealthy who leave to charity.
Anyone can. “They can use their will not only to help their whānau and friends, but also to look after a charity or a cause that they care about.”
When it comes to choosing how much to leave in a will, a percentage is often better than a fixed sum. If a good deal of time has passed since writing or updating the will, the sum in question might have been eroded by inflation.
Or, on the other hand, if your estate has dwindled, a fixed sum might not leave much for the other beneficiaries. It is something people need to be careful about because, with a will, gifts get paid first, said Talivai.
It could just be 1% of your will, said Talivai. “On average from our research, the average charitable gift in a will is around $10,000. So it doesn’t have to be a multi-million [dollar sum].”
Wills need updating periodically as well. A person’s choice of charities can change.
“Particularly we see quite a lot of people later in life who might have had a charity that’s really helped them through an illness or through a milestone,” she said.
Or some people choose charitable trusts or community foundations that pool the money and support multiple charities from investment income.
Vicki Haylock, a former chief executive of the Taranaki Foundation has decided to leave 10% of her estate as a bequest to the foundation.
“It doesn’t feel like we’re depriving our children,” said Haycock.
“Our children are still getting 45% each, and it’s an opportunity to give a significant amount as a lump sum. Some people might even choose to give a third or a quarter. But that really is an individual choice.”
Another approach is to treat charities as an additional child. If you have two children, for example, split the will three ways with a third going to charity.
Talivai said one client left three-quarters of her estate to her whānau and friends, and one quarter to be divided equally between her favourite charities.
“It was her way of really supporting the charities that had supported her. She had an illness late in life [and] she had a number of [charities] that had looked after her pets.
“She also gave to her local community. They were small [gifts], but they were all very meaningful to the charities concerned. That’s the key piece.”
Not everyone has dependents. One Public Trust staffer is in that situation and is leaving half to siblings and half to an animal rescue charity that is meaningful to her.
“It’s where I got my kitten from. Making an active choice about this feels good to me, and that I’m leaving something to a cause that’s important to me. [It’s] my small little way of helping them.”
Talivai encouraged everyone to think about including charities in their wills. Many charities are suffering from increased costs currently.
“It’s a challenging time for charities because their own costs are increasing. So even if their donations are staying about the same, actually, the costs of them being able to do what they do have increased quite significantly.”
It has to be said that giving to charity during your lifetime is more tax efficient than leaving a bequest in a will. That’s because taxpayers can claim 33.33 cents for donations to charities approved by the Inland Revenue Department - which includes most well-known charities.
That also works for people who may not be able to give to charity during their lives for a variety of reasons, but would like some of their legacy to go to good causes.
