Photo: RNZ
Fund managers are adding staff whose job it is to help investors work out what to do with their wealth when they die.
Craigs Investment Partners recently appointed a director of philanthropy and intergenerational wealth, and Forsyth Barr's head of philanthropic services, Simon Bowden, has been in the role for a year-and-a-half.
"A number of financial services firms are employing specialists to assist people with trying to understand the world of philanthropy," Bowden said. "That sometimes includes trying to understand what to do with a legacy."
He said it was likely to become a more important source of income for charities.
"We're about to see, in the history of money, the biggest wealth transfer between generations over the next 15 to 20 years.
"In New Zealand at the moment, only 1.3 percent of money that's left in wills goes to charity … many charities are having a really serious think about how they articulate how they would look after somebody's precious legacy at their organisation and what they would do with it."
Public Trust said about 7 percent of wills written with it within the last three years included a gift to charity. The average value was about $800. In 2024, the biggest increase in giving was from women aged 18 to 35. But the largest charitable contributions are from those aged 66 to 75.
A report from JB Were earlier this year estimated charities received $30 million a year from gifts in wills. It said total inheritances were estimated to grow from around $27 billion in 2024, to a cumulative total of $1.6 trillion by 2050.
"Arguably the wealthiest generation in the history of mankind [is] going to be participating in the greatest inter-generational wealth transfer ever," said Rahul Watson Govindan, chief executive of Philanthropy New Zealand.
"On the philanthropy side we've seen a lot of activation around coalescing funds and bringing people together around what kind of future they would like to see in New Zealand… how they might protect but also fund and support the future of the country they've spent so many decades helping to build."
Public Trust wills expert Cat Simpson. Photo: Supplied
Fund managers were both interested proactively in being involved and as the recipients of queries from those who wanted advice, he said.
"What the sector has realised is that the demand for this is not going to abate. There is an increased demand for these conversations because many of the people are asset rich and cash poor."
Public Trust wills expert Cat Simpson said there was an impression that leaving a gift to charity was something only very wealthy people could do.
But she said one-off gifts or leaving part of a residual estate could also be "incredibly powerful".
Kate Nelson recently wrote a will with Public Trust and said she had chosen to leave money to the SPCA because it was a charity she had supported for a long time. "I figure my family is going to do quite well out of me when I die, they don't need everything out of me…I figured they're very much on my radar, when I was doing my will I'll make sure this carries on after I'm gone."
Kate Nelson has chosen to leave money to the SPCA. Photo: Supplied
What's the best way to do it?
Simpson said there were a few ways people could opt to make a bequest.
They could leave a pecuniary gift, which was a fixed sum of money, or opt to pass on a portion of their estate.
"So once all of the expenses and the debts are covered from your estate, once you pass away and any gifts are distributed, you get what we call the residual of your estate and then you can say I want to gift 1 percent of that to a nominated charity of my choice. Or you can leave a specific gift."
She said there had been cases where people had left a house for a charity to use, shares, or a high-value object.
Watson Govindan said it was important that the gifts were things a charity could cope with.
"It's really important I think, for those who wish to make a difference, to start having that conversation early."
He said, for example, if someone said they wanted to leave money to the SPCA to build animal shelters in rural New Zealand, there should be a conversation about whether that was a feasible project, or whether there could be an alternative that was a better fit.
He said there would be an important role for advisers.
"That's where I think the professional advice is really important. Because if you invest your money purely based on your personal whims… you might have some level of success, but you can have a heck of a lot more success if you talk to a professional adviser about how to manage your and invest your money, right? In the same way, having a conversation with a professional adviser in a bequest space might be useful."
Bowden said he would start by talking to a client confidentiality about their intent - their history and the things they cared about. "Trying to understand whether they have a strong idea or a developing ideas about what they want to do.
"If you are in a situation where you've got an individual wanting to give money to charity and there are children and other descendants or other people in the family who are hoping that those monies might go to them, then there is the possibility of it being challenged, so people should do it early and they should do it in the right way with a legal adviser involved."
He said there were a growing number of community foundations that could play a part. "People are leaving money to their local community foundation … and increasingly saying we trust you, we love this place, you find the right things to give it to."
