Giving to charity in your will

It is estimated that 40% of the UK want to leave a gift to charity when writing a will, but only 6.3% actually do. The organisation, Remember a Charity, has recently carried out a survey to uncover how many people leave gifts to charities in their wills. Their research indicates that if a solicitor or other professional mentions the possibility of leaving money to charity it can result in a threefold increase in people who choose to do so.

Making a charitable donation via your will is a great way of giving back but whatever your motivation, charities are always enormously grateful to receive a legacy no matter how big or small.

How do I leave a gift to a charity in my will?

You can use your will to leave different types of gifts to charities as follows:

·         Pecuniary legacy – this is a fixed cash amount, for example,  £500

·         Residuary estate – this is a percentage of your estate, such as 20%

·         Specific gift – this is a specific item (or items) which you name, for example, a piece of jewellery or an item of furniture

What are the inheritance tax implications of giving a gift to a charity?
Giving to charity can help reduce or even negate inheritance tax. The value of the legacy given to a charity will be taken off the value of your estate before inheritance tax is calculated.

In addition, if you leave more than 10% of your estate's value to a charity, this reduces the rate of inheritance tax from 40% to 36%.

But you must make sure it qualifies as a charity!

There are so many deserving charities, but it is always worth double-checking that the one you have in mind is registered with the Charity Commission, as this will ensure that it is a reputable organisation. Their website is

https://www.gov.uk/find-charity-information

When searching the Charity Commission website it is a good idea to check for red flags against the charity and to see if they are subject to a statutory demand. If so, it means that there are concerns that have been raised with the Charity Commission about the way in which the charity operates and it may mean that they will be investigated for misconduct.

Can I leave a gift to multiple charities?

Yes, you can leave gifts to as many charities as you wish. There is no limit on the number or the amount that you leave to a charity.

How will the charity use my gift?

The charity may use the funds in various different ways. A few examples might be for research purposes, to fund services provided by the charity, for marketing to increase awareness or to pay for staff.

If you want to attach specific stipulations as to how your gift will be used, you will need to contact the charity and discuss your wishes with them before you include this instruction in your will. 

Can family members contest donations to charities in my will?

There are provisions under the Inheritance (Provision for Family and Dependants) Act 1975 that state that you must leave reasonable financial provision to any dependents that you have. If your will does not do this, those individuals may have a claim against your estate and they could contest any charitable gifts you have made in your will.

It is therefore important to discuss matters with a specialist solicitor who has a deep understanding of the implications that might be relevant to you. They will be able to give you advice so that you can be assured that your wishes will be carried out when the time comes. 

If you would like to make a will - whether you want to leave a gift to a charity or simply provide for your loved ones - then please contact one of our will specialists who will be happy to have a free 15-minute phone conversation with you. I am based in our Colchester office and can be contacted on 01206 217609 or leah.woodlee@birkettlong.co.uk.