BEQUESTS IN A TIME OF CRISIS: PREPARATION IS KEY

BEQUESTS IN A TIME OF CRISIS: PREPARATION IS KEY

During this current COVID-19 crisis, several media reports suggested that more people were writing or updating their wills as a result of the crisis. AskRIGHT reached out to two major Australian law firms to gain information that would help clarify whether in fact more people are reviewing their wills and what impact this may have on charitable bequests.   

AskRIGHT Principal Consultant Pamela Sutton-Legaud spoke with Ilana KacevSenior Associate, Russell Kennedy Lawyers and AskRIGHT DirectorDr Daniel McDiarmid spoke with Rachel Lusis, Solicitor at dGroots wills and estate lawyers. Their responses confirm that indeed there has been an increase in the people reviewing their wills. It may be that charities will miss out if bequestors prefer to give a larger proportion of their estates to families rather than charities. How charities behave and perform over this period seems to impact bequestors’ decisions about whether or not to leave a bequest. 

Have you seen a marked increase in enquiries to prepare a will?   

Russell Kennedy prides itself on providing premium estate and succession planning advice nationally to high net worth families and individuals. They advised that there has been an increase of enquiries relating to Wills. Mostly from existing clients who have Wills in deeds with them and had been deliberating on revising their Wills. COVID-19 has acted as a big prompt to getting them to make the updates. 

To what extent do you think these enquiries are influenced by COVID-19?

Amongst the elderly, COVID-19 has had a big influence because they feel they are more vulnerable to the virus and they cannot afford to hold off on making/revising their Will. There have also been enquiries amongst younger people as they are less busy with social activities and have more at home time to be considering these issues. 

To what extent do bequestors consider charities when they make a will? 

On average, 1/10 people think about leaving money to a charity in their Will. Some will consider it as a last resort, i.e. if no one in their cascading provisions survives (no children, grandchildren, etc.), then they leave it all to a charity. Some people still want a particular charity to receive money even if their spouse and/or children survive – it often depends on their association with the particular charity. 

Has anything changed in relation to bequests because of COVID-19?

Russell Kennedy have noticed a change in bequests. For example, one client had numerous bequests in her previous Will to various charities, but, as a result of COVID-19, she was concerned that her children, who work in professional services, could lose their jobs and she wanted to ensure that they were provided for by her to the maximum amount possible, so she removed most – if not all – of the bequests to charities. She said she may put them back in time when the situation changes and depending on what happens with her children’s jobs. 

Do bequestors tend to review the charities they make a bequest to when reviewing/updating? 

Sometimes people will change and/or remove particular charities from their Wills. Will-makers can get quite opinionated on the conduct of the charities or their purposes and will have strong views as to whether they should leave money to them or not. Sometimes they might just review the amounts gifted to them. 

What influences them to change a nominated charity? 

The conduct of the charity and whether their goals or mission has changed over time. If the will-maker no longer identifies with the purpose of the charity or thinks there is another charity more aligned to their values. This might happen with the various charities set up for the welfare of animals. There are various kinds of charities but some may be more specific and therefore relate to a will-maker’s values. 

Do you believe clients may feel more or less likely to be willing to talk to charities about a bequest at this time? 

Russell Kennedy received several requests from charities wanting to update the wording to be provided to potential bequestors due to unsolicited bequest enquiries. Therefore, it seems important for charities to prepare themselves and put in place systems to make it easier for people to leave them a bequest. It is a time when individuals have been encouraged to think about their wills and many people do not have families to whom they can leave their estates. So charities shouldn’t stop asking and should be better prepared to deal with any enquiries. 

A Philanthropic Approach 

De Groots wills and estate lawyers have a reputation for providing premium estate planning advice for high net worth clients. In reality, their clients come from all walks of life. The common thread? They are all seeking the best legal advice to assist them to put their wishes into effect in the context of their unique personal and financial circumstances. 

De Groots advised, in terms of recent trends in bequests, more clients are taking a philanthropic approach to their estate planning leaving bequests to universities for research and charities, in particular to those associated with a specific medical condition. The counterbalance to that trend is the strong desire for many people to pass their estate to bloodline family members only. Setting up testamentary trust wills for bloodline beneficiaries to benefit from the asset protection provided is actively sought by many of our clients. Generally, people are more aware that with an increase in life expectancy they may suffer from an extended period of incapacity. As a result, we are seeing people putting in place the full suite of estate planning documents including an enduring power of attorney and advance health directive in addition to a will. 

If you have a question about bequests strategies, please contact Pamela Sutton-Legaud, Principal Consultant AskRIGHT Australia. For specific legal enquiries, contact:

 

Ilana Kacev
+61 3 8640 2370
ikacev@rk.com.au

 


Rachel Lusis
+ 61 7 3218 4783
rlusis@degroots.com.au

 

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