‘Remember a Charity in your Will Week’ is a good moment to think about why we might and why we should do just that.
We are all quite comfortable with the concept of giving money to charity. We respond generously to the various high profile campaigns from charities as diverse as Comic Relief, The Royal British Legion and Children in Need as well as helping to raise millions of pounds each year for emergency appeals launched in response to disasters around the world as well as supporting our local ones.
But leaving money to good causes in our Wills? We don’t seem to be quite as good at doing that. Whilst 74% of us in the UK support charities during our lives, only 6% of us actually go on to leave them a gift in our Wills. And yet charitable legacies (bequests) are the underpinning for many good causes and vital if they are to continue their valuable work. It is estimated that a simple 4% improvement in the numbers who leave a charitable bequest in their Will could yield UK charities an additional £1 billion per year.
If an improvement in our charitable giving following our death is so vital, how can we ensure that we leave our favourite charity something from our estate?
A Will is probably the most important document we will leave behind, determining how and where our assets are distributed as well as affecting our family’s memory of us. Surprisingly few of us ever write a Will so when we take the trouble to do so it makes sense to ensure we take advice from someone who is qualified to prepare such a document. The most reliable person is likely to be a solicitor experienced in guiding us through the process and preparing the Will. Drafting a Will is a skilled process and involves not simply production of the document itself but collating sufficient information about you and your family as well as your assets and debts to ensure the Will you end up with is the Will best suited to you. However corny it may sound, a Will is unique to you because you are unique. The process will also include looking at what impact tax might have on your estate and how it can be legitimately lessened.
What impact does tax have on charitable giving? Fortunately charitable donations and legacies are free from tax. If you are a UK taxpayer you are probably familiar with the concept of ‘gift aid’ whereby charities can recover income tax from HMRC on gifts made by you. After death, if your estate is large enough to pay inheritance tax, then any charitable legacies will be free from that tax too and if you decide to leave enough of your assets to charity in your Will, your estate can benefit from a reduced rate of inheritance tax on that part of your estate on which the tax is payable.
Charities are not expecting to receive large sums from us in our Wills. They are always appreciative of any amount they are gifted however small it might be and leaving a small charitable gift in a Will, once family and friends have been looked after, can actually make a big difference to them. And it is not simply the large nationally recognised charities we can benefit but also the myriad small locally based charities peculiar to your area.
So, if this article has prompted you to put ‘make a will’ at the top of your ‘to do’ list, please do make contact with a local solicitor and start the process. It will not be as intimidating or as expensive as you might imagine and is likely to be the best thing you tick off your ‘to do’ list this year!