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Be willing to give advice

Be willing to give advice

By Kim Carter

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How lawyers raise the charitable question can have an impact on legacy giving.

Be willing to give advice How lawyers raise the charitable question can have an impact on legacy giving. Australia is a generous nation. In 2016, the Giving Australia report found that 14.9 million people (80.8 per cent of the adult population) donated $12.5 billion to charity.

But while most Australians donate to charity in their lifetime, only 7.4 per cent include a charitable gift in their will. That’s because often they never thought they could leave a legacy for a cause they cared about. It’s also possible their lawyer hasn’t mentioned it. Research by the Include a Charity social change campaign has found that three times as many Australians would be willing to leave a charitable gift if it was more top-of-mind when making their will. According to Include a Charity campaign director Helen Merrick the US and UK are further ahead in using charitable gifts in wills. “In Australia, we need to rethink what a philanthropist is.

It doesn’t just mean a wealthy person or a celebrity. Lots of ordinary, hardworking Australians can leave gifts in their will. To move that 7.4 per cent figure, we need to encourage more Australians to think about their legacy,” she says. That’s where lawyers can help. The way a lawyer talks to a client about including a charitable gift is a vital influencer because they are usually the first port of call for will-making. But according to Include a Charity only 21 per cent of solicitors ask the question. Why not? Paul Evans, a partner at Makinson D’Apice, says lawyers might not want to mention charitable gifts because they may feel they are intruding in a client’s decision-making process.

He believes lawyers shouldn’t avoid the subject. “It’s a part of a solicitor’s duty when drafting a client’s will to assist, advise and provide them with options, which involves asking them if they support a charity and whether they wish to include a charitable gift to that cause.” Jennifer Maher, an estates and wills specialist at KCL Law, agrees and adds that some lawyers don’t ask their clients about charitable gifts because they don’t know how to implement them, or they worry about offending the client. “There’s also the historical factor: lawyers traditionally took instruction from clients rather than giving advice. Many lawyers still perceive receiving instruction as their primary role. But lawyers are becoming advisers to clients, in areas like asset protection, tax benefits and certainly philanthropy,” she says.

Starting the charity chat Both lawyers believe there’s no downside to asking the question: “Now that you’ve provided for your loved ones, are there any charitable causes you might consider for a gift in your will?” They believe that while most clients appreciate the question, those who aren’t interested in discussing it will quickly let you know. Mr Evans suggests starting by asking a client to list all the groups/people they want to be included in their will. “It’s a useful approach to exploring whether the client has considered leaving a gift to a charity,” he says. Ms Maher finds many clients don’t know charitable gifts in wills are an option. They also worry about familial reactions. “Often they are worried their family may be upset about it. However, after walking the client through obligations to family and if the estate is a significant size, it becomes clear that a charitable gift shouldn’t cause issues because there’s sufficient and adequate provision for all,” she says.

A UK study found that people’s likelihood of including a charity in their will is affected by the language lawyers use and concluded that how they raise the charitable question can play a significant role in legacy giving. The study revealed that framing (eg, are there any charities you particularly care about or have helped you and your family?) may be helpful in encouraging the client to consider gifts in wills.

Mr Evans also suggests using the term gift in your will or charitable gift when speaking to clients rather than bequest or legacy which some people feel are the domain of the wealthy. Using a phrase like leaving a gift in your will to charity could alleviate that perception.

 

Don’t suggest charities

Sometimes clients will ask what charity they should give to. It’s not a good idea to offer suggestions as it might be perceived as a conflict of interest. Ms Maher and Mr Evans believe it’s better to bring the conversation back to the client and ask what causes are important to them. Invariably they will mention a cause that has had an impact on their lives. Ms Maher says if a client isn’t sure which charity to support, she steers them to the ACNC’s Charity Register or the Include a Charity website as they are reputable sources of information. Kim Carter is with the Fundraising Institute of Australia.

 

Tips

1. Ensure the client has the correct name of the charity.

2. A will should specify the charity’s ABN number.

3. A will should also have some provision for flexibility in case a charity amalgamates or, if it closes, the gift can be offered by the executor to a similar entity.

 

Kim Carter is with the Fundraising Institute of Australia.


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