Australian Wills to Charity Blocked: AFCA Overrides Testators in 89% of Cases

A new study by University of Sydney Law School has exposed a major gap in Australian superannuation law. The Australian Financial Complaints Authority (AFCA) honours a deceased person’s will in only 11.2% of cases that discuss it, according to analysis of 269 AFCA decisions. This means charitable bequests are routinely overridden when family members dispute the distribution.

How AFCA Sidelines Charitable Wishes

Associate Professors Natalie Silver and Ben Chen analysed 116 AFCA cases that mentioned a will. Only 13 cases, or 11.2%, resulted in distributions matching the testator’s wishes. AFCA gives primacy to dependants’ interests, the researchers found. This leaves charities with almost no protection when family members challenge a bequest, even if the will is clear.

Why Superannuation Charity Gifts Are Trapped

Superannuation is now the principal source of wealth for most working Australians, alongside the family home, Silver and Chen write in a forthcoming Melbourne University Law Review paper. Most Australians die with the majority of their super balance unspent. Yet the law on distributing deceased super is unduly complex, making it difficult to leave money to charity. A case in point: a father died with nearly $100,000 in unspent super and left it to charity in his will. His middle daughter received the entire sum after AFCA’s decision, despite two sisters being cut out.

The Legal Complexity Blocking Charitable Intent

The researchers argue that law changes would make it easier for money to be left to charity. Currently, AFCA’s focus on dependants’ needs overrides written testamentary intent. The system treats superannuation differently from other assets, creating obstacles that do not exist for wills involving property or cash. The case highlights difficulties faced by will-makers in ensuring their unspent super goes to intended beneficiaries.

What This Means for Testators and Charities

For Australians planning to leave super to charity, the research signals a hard truth: family disputes often override your wishes. Charities lose potential funding when AFCA prioritises dependants. The Treasury report cited by Silver and Chen shows most Australians retire with significant super balances intact. Without legal reform, those charitable bequests remain at risk of being redirected to family members who contest the will.

Final Thoughts

AFCA’s 11.2% compliance rate with wills on super distribution reveals a structural flaw in Australian law. Testators cannot reliably direct charitable gifts from superannuation, and charities lose millions in potential funding. Legal reform is needed to honour written intent.

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