Rosemary may not have had children, but family and the community were important to her. So when her uncle became ill, she didn’t hesitate to take time off work to look after him.

“She didn't realise he was very wealthy in his own right,” says Equity Trustees Private Client Advisor Steven Leung. “So when he passed away, she inherited quite a substantial amount of wealth.”

Her uncle’s wealth was highly concentrated in just a handful of blue-chip shares such as BHP, Commonwealth Bank, Wesfarmers and Rio Tinto, which had appreciated in capital value over decades. Selling those shares would crystalise a $1.5 million gross capital gain with an estimated tax bill of over $300,000.

Steven suggested a strategy that would diversify Rosemary’s newfound wealth and minimise her tax bill, while also boosting her philanthropic giving.

“I said ‘We could potentially do a gradual sell-down of these stocks over say ten years in order to spread and reduce the impact of capital gains tax and where you're realising a large taxable capital gain, we can always make a donation to offset it. By that time, she'd already set up her own structured giving vehicle so she could contribute to her favourite philanthropic causes.”

Rosemary’s account sat within the Equity Trustees Charitable Foundation, a public ancillary fund managed by Equity Trustees. Rather than donating capital to a one-off philanthropic cause, sub-accounts such as hers are managed in perpetuity, donating investment income to any chosen eligible charity. Donations into the account are tax deductible while Equity Trustees takes care of all of the ongoing investment, administration, and compliance requirements.

“Some people just want the deduction to reduce their tax liability whereas for her, it reduced the amount of tax payable and provided her with the opportunity to diversify her portfolio by re-investing the sales proceeds into other various investments. But the most important thing was she could then donate money to her own philanthropic giving vehicle and make recommendations as to where the charitable distributions were going.”

Over the next eight years, Rosemary contributed about $800,000 to her charitable account within the Equity Trustees Charitable Foundation. It eventually grew to nearly $2 million, allowing her to direct investment income to causes she was passionate about including the National Gallery of Victoria, the Asylum Seeker Resource Centre, the Melbourne Symphony Orchestra, the Peter MacCallum Cancer Foundation, and the Murdoch Children’s Research Institute.

Rosemary also made a decision to leave almost one-third of her estate to her charitable account, with the remainder distributed to family members. It has created an enduring legacy that will now live on in perpetuity.

“Ad hoc donations to various charities are great, but having a structured approach to giving is also very important and powerful,” Steven says.

Equity Trustees National Manager, Active Philanthropy, Denise Cheng, says a rising number of clients share similarities with Rosemary, with many people now thinking beyond their immediate family. An estimated $5.4 trillion of intergenerational wealth is expected to be transferred over the next 20 years, according to a recent JB Were report.

“For some families, legacy is about the next generation and successors. For Rosemary, her legacy will include her philanthropic contribution to community and her charitable account will now continue forever, supporting her favourite charities.”