Can I leave my Israeli apartment to a charity in my will, and does it matter that the charity is American?

A widow in New Jersey wants her Jerusalem apartment to go to the hospital that treated her husband. She writes it into her American will in the way an American lawyer would: to the children's medical foundation in Jerusalem, for its general purposes. Ten years later the Israeli court is asked to decide which of four organisations with similar names she meant, and whether the provision means anything at all. The tax on this bequest is nothing. The drafting is everything.

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Detailed Answer

Israeli succession law leaves a testator free to give property to whomever they choose, including a charity, an Israeli registered association (עמותה, amuta), a foreign non-profit or a university. The transfer itself is cheap: under Section 4 of the Real Estate Taxation Law 5723-1963 inheritance is not a sale, so neither betterment tax nor purchase tax is triggered when an Israeli apartment passes to the beneficiary named in the will, and Israel has had no estate tax since 1981. What defeats charitable gifts in Israel is identification. Section 33 of the Succession Law 5725-1965 voids a provision of a will from which it is impossible to see to whom or what the testator bequeathed, and Israeli charities are not helped by naming conventions in which a dozen organisations share three words. Name the recipient by its full registered name, add the Israeli association or company number, or for a foreign charity its state of incorporation and registration number, and name a fallback recipient in case the organisation has merged or dissolved by the time the will takes effect.

There is a second decision most non-residents do not know they are making. A bequest that hands assets over outright is simple. A bequest that asks for the money to be held and applied over time, for scholarships or an annual prize, creates an endowment (הקדש, hekdesh), and endowments are a regulated structure rather than a wish. Section 17(a) of the Trust Law 5739-1979 requires a written deed of endowment, signed by the founder before a notary or contained in a will other than an oral will, setting out the purposes, assets and conditions. Section 26 obliges the trustee of a public endowment to notify the Registrar of Endowments within three months of becoming trustee, and the Registrar, sitting in the Corporations Authority at the Ministry of Justice, then supervises accounts and expenditure for as long as the endowment exists. For most families abroad that supervision is disproportionate, and an outright gift to an existing amuta with the same purpose achieves the same result without an annual filing obligation in Hebrew. Practically, whether the will is Israeli or foreign, the charity will need either an Israeli bank account or an Israeli representative to receive the proceeds, and executors usually sell the apartment and remit cash rather than register a foreign charity as the owner of Israeli real estate. Where the Israeli assets are significant, this is one of the strongest arguments for a separate Israeli will alongside the foreign one, drafted to be probated in Israel without a translation fight. For a US citizen there is a useful asymmetry worth knowing: a bequest to a foreign charity qualifies for the estate tax charitable deduction under IRC Section 2055, while the same money given in life would not be income-tax deductible under Section 170, which requires a domestic organisation.

In Practice: Section 33 of the Succession Law 5725-1965 is what voids a charitable gift described too loosely, and it is the most common reason an Israeli court refuses to give effect to a foreign will's charitable clause. Section 4 of the Real Estate Taxation Law 5723-1963 keeps the transfer itself free of betterment and purchase tax. The order that lets the charity take the asset comes from the Inheritance Registrar (Rasham HaYerushot) at NIS 597 on paper or NIS 507 online plus a NIS 66 publication fee, and an uncontested application from abroad runs three to six months, longer where an Israeli charity must first prove it is the organisation named.

When to Consult a Lawyer

• You have close relatives who will be disinherited by the gift. Israeli courts hear challenges based on capacity, undue influence and improper involvement in making the will, and a charitable bequest from a testator abroad in their eighties is a standard target.
• The gift is conditional, staged, or asks that the property be kept and let rather than sold. Those instructions create an endowment with a supervising registrar, and they need to be drafted as one rather than described in a sentence.
• The charity is foreign and has no Israeli presence. Somebody has to be able to sign in Israel, open a file with the Land Registry or the bank, and give the executor a receipt, and that has to be arranged in the will rather than discovered afterwards.

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Speak With an Israeli Attorney

We draft the charitable clause so it survives Section 33, decide with you whether an outright gift or a registered endowment fits the intention, and confirm that the named organisation still exists in the form the will assumes.

Contact us for a confidential initial consultation.