‘Remember A Charity Week’ aims to raise awareness of the benefits of leaving a financial gift to charitable causes in your Will and this year runs from 6 – 12 September. The event is organised by ‘Remember A Charity’, which is itself a charity, and brings together 200 charities that rely on gifts in Wills to continue their good work.
In 2018, more than £3 billion was donated to charities through provisions made in Wills, but in June 2020, more than half of the charities were reporting significant reductions in donations, due in large part to the pandemic. If these charities did not see an improvement in the situation soon, almost a third predicted they would close altogether.
The pandemic brought the work of some charities into sharp relief, such as those involved with clinical research, health support services, of the mental health of young people, but for many smaller charities, unable to weigh in with TV campaigns, or having to close high street shops, the donations simply dried up.
In the short term, these problems are understandable, given the financial hardship faced by many households throughout the recent challenges. But this is why, perhaps this year more than any other, it is important to spread this message about leaving money to charity in a Will, to ensure these valuable services are not lost for future generations.
Is it easy to gift money to Charity in a Will?
If you wish to make a charitable donation upon your death, the exact amount you wish to leave, or the way in which an amount should be arrived at (e.g., a certain percentage) must be clearly stated within your Will.
There are a number of ways you can make a donation in your Will to benefit your chosen charity or charities:
- Residuary legacy: The amount left over once all other bequests to your loved ones have been made and all other expenses or taxes have been paid.
- Pecuniary legacy: A specific amount of money that you choose to leave to a particular charity or charities.
- Specific legacy: Gifting particular items, such as stocks and shares, land, property, or even a Life Insurance pay out.
- Contingent legacy: Leaving a charitable donation when another specified event does or doesn’t occur prior to your death, such as one of your beneficiaries dying before the Will is executed, which would gift their portion of your estate to your chosen charity instead.
Once you have decided you wish to ‘Remember A Charity’ in your Will, obtain a sensible valuation of your estate, which may help you decide the most appropriate form of legacy. Then source the address and registered charity number of your chosen charity from the Charity Commission’s website.
To ensure the right charity benefits from your gift, make sure you get their registered details (spelling of their name, charity registration number, etc.) correct. A qualified solicitor or professional Will writer will then ensure to include these details in the correct manner within your Will.
How much does writing a Will cost?
The cost of a Will varies on its type, the amount and value of possessed assets, along with the complexity of the estate.
For example, a single Will with nominal assets could cost as little as £350.00 plus VAT. Whereas a to shield the bequest of your assets until certain conditions are met, where there are children from a previous marriage or there are complex circumstances, a specialist Will to address your unique circumstance might cost closer to £600 plus VAT.
Can I update my Will to leave money to a Charity?
Making a small amendment, such as leaving money to Charity in a Will, can sometimes be done by adding a codicil to your existing Will.
A codicil is like adding a legal postscript to your Will. It should outline any changes or additions to the existing document before being signed and witnessed as per the original Will, then kept alongside it to ensure both documents are read and interpreted together in the event of your death.
Alternatively, you could revoke the old will and make a new one – thus reducing the possibility of any confusion that could come from translating a codicil add-on. However, this option may cost you more.
Are charitable donations in a Will tax free?
The gift to Charity in a Will is free from Inheritance Tax. You will reduce your IHT liability (if tax is due) and lower the amount of money paid in tax upon your death. If your estate is liable to Inheritance Tax it may also decrease the rate of IHT you pay. If you gift more than 10% of your estate’s net value to charity, the IHT rate will shrink from 40% to 36%.
If you are considering leaving money to charity in a Will, then ‘Remember a Charity Week’ is the perfect opportunity to act today to make a difference tomorrow.
For more details about writing a Will or amending your current Will, please get in touch with Alex Drake, a member of the of the Society of Trust and Estate Practitioners and Head of the Private Client Department, here at Taylor Walton.
She is based in our St. Albans office and can be reached on 01727 845245 or by email alex.drake@taylorwalton.co.uk