Have you considered leaving a legacy in your will?
- AuthorPhoebe Trott
Last week, after a devoted Norwich City FC fan sadly passed away, it became clear that he had left a legacy in his will to buy all the players a drink.
Did you know there are different types of legacies which could be included in a will, depending on how you wish to leave your assets?
A specific legacy can be used in a will where an individual would like to leave a specific item to a particular person. Examples of specific legacies include leaving your classic car to you son or your jewellery to your daughter.
A specific legacy can also be used to distinguish the asset in question from similar property. For example, an individual may own several antique clocks at the time of death, so the need to distinguish between each becomes important. If the specific asset does not exist at the time of death, the legacy will fail.
As demonstrated by the Norwich City FC fan, an example of a pecuniary legacy is when an individual leaves a fixed sum of money to a particular person or group. For example, an individual could leave £1,000 to each grandchild alive at their death.
A pecuniary legacy can be any sum of money and you can request that it be linked to inflation in order to retain its ‘today’ value over the years. Leaving a pecuniary legacy in your will also gives you the freedom to decide who you would like to inherit your money after you’ve gone.
A charitable legacy occurs when you leave a gift to a registered charity in your will. Recent research from Remember A Charity highlighted that nearly a quarter of adults across the UK believe that you have to be wealthy to donate to charity in your will.
For many charities, they rely on the receipt of donations made in wills to fund vital research and projects. No matter how big or small, every donation helps. Some people choose to leave legacies to charities which are close to their heart or as a way of saying thank you, to help fund charitable work in the future. Birkett Long’s charity of the year, Essex and Herts Air Ambulance, states that 1 in 10 missions is funded by a legacy left in a will.
Recent statistics from Legacy Foresight show that gifts to charities were down by 8% in the third quarter of 2019.
Did you know that leaving a charitable legacy in your will has financial benefits as well as emotional?
Any legacy gift to a charity is exempt from Inheritance Tax. Since April 2012, if an individual leaves at least 10% of their net estate to charity, they can benefit from a reduced rate of inheritance tax. This lower rate will be at 36% rather than the usual higher rate of 40%, to pay on the remainder of their estate, after utilising the Nil Rate Band tax free allowance of £325,000.
If you would like to discuss making legacies in your will or reviewing your current will, then please contact one of our specialist wills, trusts and probate lawyers. I am based in our Colchester office and can be contacted on 01206 217389 or email@example.com.