How to leave money to charity in your Will
What are the benefits in leaving money to charity in your Will? Remember a Charity Week takes place between 9-15 September 2024 and highlights the significance of charitable giving. The week is a reminder of the crucial role charitable donations in Wills have and is a chance to highlight the valuable contributions that charities in the UK make to important causes, whether on a local or national level. It serves as a reminder of the importance of making a Will to guarantee that your assets are distributed in accordance with your wishes and benefit the people or causes closest to you.
Blake Morgan are proud supporters of the campaign and hope to encourage more individuals to make a Will and consider their options around charitable gifting. This year’s initiative honours the special memories, fascinating pastimes, and distinct characteristics that we fondly remember and appreciate about our family and friends.
Why should you leave a gift to charity?
Gifts in Wills are vital for charities to continue their important work. In fact, many charities rely on gifts from individuals in their Wills. Whilst many people choose to leave their estate to family and friends, a Will also offers the opportunity to leave a gift to a charity that means a lot to them. Even a small charitable gift can make a significant impact.
According to Remember a Charity, gifts in Wills play a crucial role in supporting charitable services nationwide, generating over £4 billion for various causes each year – with around £3 in every £10 donated to charity being through gifts in Wills.
These gifts cover the cost of six out of every 10 RNLI rescue missions, over half of the British Heart Foundation’s financial support, more than a third of Marie Curie’s hospice services, while also providing crucial support for numerous small community charities. Thus, it goes without saying that this support is vital to ensure the continuity of the work these charities, and countless like them, do.
In addition to supporting those causes closest to you after you die, gifts made to charity in a Will also have potential inheritance tax benefits.
Inheritance Tax
An individual wanting to make use of any exemptions and reliefs available to mitigate their estate’s inheritance tax liability should consider leaving a portion of their estate to charity.
Under current legislation, any gifts to a qualifying charitable body are exempt from inheritance tax. If the gift is worth at least 10% of the chargeable estate, a special reduced rate of inheritance tax (36% rather than the usual rate of 40%) applies to the remainder of the estate. This was introduced in 2012 to encourage more people to give to charity.
You should consult with an expert who can advise you on inheritance tax and estate planning matters, as the rules and calculations involved are complex and tailored advice can ensure your Will is suitable for your circumstances and has the desired effect.
How to leave a gift to charity
Anyone can leave a gift to charity in their Will, whether it be to show appreciation to a charity or cause that is of significance to you and your loved ones, or to utilise the above inheritance tax benefits.
The charity you wish to benefit and amount of money you leave to charity is entirely up to you, provided the gift is made to a qualifying charitable body. It is your decision whether you choose to specify a specific figure or a percentage of your total assets when making the gift.
A common misconception is that a gift becomes invalid if the name of your preferred charity has changed, the charity has merged with another charity, or simply does not exist anymore. A professionally drafted Will typically addresses these administrative issues and ensures any gifts to charity in your Will stand the test of time. Your Will could address this by making alternative provisions or permitting your executors to select a similar charity to receive the gift. This will all depend on how the Will is drafted, so it is important to seek legal advice to ensure your Will is suitable.
How can we help?
We recommend seeking legal advice if you are considering your Will or want to do some estate planning. It is important to keep existing Wills under review and change them as necessary throughout your life.
Our Succession & Tax team are specialists in these areas and offer personalised advice on leaving charitable gifts in a Will and estate planning.
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