Help! I’m new to charity estate administration – where do I start?

If you’ve recently taken on the responsibility of administering estates for your charity – congratulations! You are performing an essential role in the Gifts in Wills process – shepherding gifts that generous bequestors intended for your charity to have and ensuring your charity receives their full entitlement. 

Please note that this article is a general overview from our experience as estate administrators and not intended as legal advice.

The basics of charity estate administration

After a person passes away, their will nominates an executor (such as a friend, solicitor or trustee) to administer that estate. The executor might in turn hire a solicitor or other assistance to help with administration.

Your role as a charity estate administrator will be to liaise with these individuals to move funds and assets gifted to your charity from the estate to your organisation. There’s a lot of work involved in that process, from communicating on behalf of your charity to collecting documents and checking to ensure you’ve received your full entitlement under the will. You may also have to navigate questions and issues along the way such as share transfers, legal challenges to the estate, requests from executors to be paid a commission and providing instructions on how assets such as real estate should be handled.

Some estates are very simple: you’ll receive a notification and a cheque in the mail and simply have to request a copy of the will and receipt the gift. Other times, you’ll be faced with a litany of challenges that may take years before the gift is fully distributed to your charity. You will need clear internal processes to ensure that nothing slips between the cracks.

Is this role that important? Can’t most of the work be left to the executor?

Executors, solicitors and trustees administering estates generally do the bulk of the work such as applying for probate, disposing of the assets of the deceased and selling any properties in the estate. But the role of a charity estate administrator is essential for a few reasons.

Firstly, a gift in will creates a legal obligation on the charity to use a gift consistently with the purposes stated by the testator (person writing the will). We have seen instances where lax charity estate administration has meant a charity accepts a gift that was not intended for them, or have failed to use the funds in line with a restriction in the will. Charities also must hold appropriate estate documentation in case of auditing. You are responsible for ensuring your charity has the right documentation in each instance.

Secondly, you are also responsible for ensuring solicitors and executors have the information they need in a timely fashion and are appropriately thanked for their work. We have seen instances where an entire estate has been held up by a charity being slow returning forms or communicating their bank details with a solicitor. This can seriously damage a charity’s reputation and leave executors and solicitors feeling frustrated or like the charity isn’t grateful for their work and the gift. We know this isn’t the case – but solicitors and executors may not be familiar with how complex things such as share transfers are for charities.  

Finally, charities can increase their Gifts in Wills income through proactive estate administration – checking estate documentation for errors, advising solicitors to seek tax advice and negotiating on inappropriately high fees and commissions. We estimate that Gifts in Wills income increases by 10-15% when proactively managed, particularly through avoidance of unnecessary Capital Gains Tax, handling of excessive charges and prevention of missing gifts. What could an extra 10-15% on your annual Gifts in Wills income mean for your charity?

What will I need to succeed?

There are three main things you’ll need to succeed in your role as a charity estate administrator: time, tool and knowledge.

You need time to manage estates – which we know can be in short supply if estate administration is not your only responsibility. You might also have pressing work to be done with living individuals considering leaving a gift to your charity.

Also important is a tool that allows for estate administrators to see what bequests are open, track administration progress and calculate what the charity are entitled to. We know many charities who are struggling to manage bequests either in an Excel spreadsheet or using a CRM that is designed for living donors.

And finally, knowledge of deceased estates is essential. In our opinion, “estate administration” is a misnomer – in reality this work is not just administration but involves some knowledge of the law, taxation and, at times, how to navigate tricky relationships. To succeed, you will need knowledge in topics such as what documents beneficiaries are entitled to, what assets are impacted by Capital Gains Tax and how to check for probate in different states and territories. 

Beyond these three key things, estate administrators also benefit from a supportive wider team. You will often need assistance from your Finance or Legal teams with tricky assets and legally complex estates such as Family Provision Claims.

Where can I get more information?

In order to build your knowledge of estate administration, we have a few resources that might be helpful.

We keep a free, up-to-date list on where you can search for probate in each state and territory on our website here. Also free are our regular webinars on various topics related to estate administration. You can sign up to receive communications about upcoming webinars here.

To help develop a systematic approach to your bequests and learn more about estate complexities, our Guidebook (available in PDF or print) might be useful. Order a copy here.

When you’re ready to really hit your stride, we offer a comprehensive suite of training to help you skill-up in estate administration. For those who are regularly administering estates but don’t have mountains of experience, our Beginner/Intermediate Masterclass is the perfect place to start, read more here. Over three weeks, you can complete the modules in your own time and have your questions answered in live Q and A sessions with the Bequest Assist team.  

Finally, while Bequest Assist’s work is focused on administering estates on behalf of our clients, we have a broader mission to help the charitable sector as a whole with their Gifts in Wills. Please don’t hesitate to be in touch with us with questions or if you hit a tricky estate that you need support on. We’re available at info@bequestassist.com.au

A final word on estate administration

Being a new estate administrator can at times feel overwhelming, but we promise it’s one of the best jobs in the world. You get to see day-in, day-out the incredible generosity of your charity’s supporters who entrusted you to do good things with the wealth they accrued across their entire life. What’s more, you’ve just joined one of the most open and supportive networks of colleagues who make collaboration and continuous learning a priority.

Welcome to the world of estate administration. We can’t wait to work alongside you!

- Morgan Koegel, Managing Director, Bequest Assist