In his will, Watt left two bequests to the Australian Aero Club, one of which was used to establish the Oswald Watt Gold Medal for outstanding achievement in Australian aviation. Winners of the award have included Charles Kingsford Smith, Bert Hinkler, Henry Millicer, Ivor McIntyre, Jon Johanson and Andy Thomas. He also bequeathed a sum to the Royal Military College, Duntroon, to award annually a set of binoculars for the best cadet essay on military aviation or aeronautics. The award was founded as the Oswald Watt Prize later in 1921. Most of the residue of Watt's estate went to the University of Sydney. Considered one of the university's great benefactors, he was commemorated by the Oswald Watt Fund. In May 1923, the Oswald Watt Wing of the Havilah Home for Orphans, Wahroonga, was opened by the Governor-General of Australia. Watt was acknowledged as both a source and a reviewer by F.M. Cutlack in the latter's volume on the Australian Flying Corps that was first published in 1923 as part of the "Official History of Australia in the War of 1914–1918". During World War I, Oswald Watt had been the only AFC officer to command a wing apart from Lieutenant Colonel Richard Williams, who was later to become known as the "Father of the RAAF". In 2001, military historian Alan Stephens noted that "had fate drawn him to a post-war career in the Air Force instead of to business and an untimely death, 'Toby' Watt might have challenged Richard Williams as the RAAF's dominant figure in its formative years".