Why Do People Leave a Gift to Charity in their Will?
You’ll probably donate to a number of charities throughout your lifetime, with a closer affinity to some. But when it comes to writing your Will, did you know that you can leave a gift to them when you die?
This is called a legacy.
Remembering a charity in your Will is a final gift that you can leave to a charity that’s close to your heart or has helped you or a family member during your life.
But many people forget to leave a legacy in their Will.
Some of the more common reasons why people don’t leave a gift to a charity is because they:
- Don’t think about it when making their Will
- Are worried that it’ll take money away from their families
- It gets taxed
But, these are mostly myths. You can get great tax breaks from leaving a legacy in your Will, and with the effects of the global pandemic being felt by all charities, now is the time to really think about whether you want to leave a gift in your Will to a charity when you make a Will.
Benefits of Leaving a Gift in Your Will
There are the obvious, heart-warming reasons for leaving a gift to a charity in your Will. You may want to know that you’ve made a difference to someone else’s life and supported a charity that you’re are passionate about. It could also be a comfort to your family and friends to know that you legacy lives on after you’re gone.
But actually there are other really good reasons why leaving a legacy to a charity in your Will is a good idea. The Inheritance Tax rate is 40% on everything over £325,000, or £650, 000 for a married couple. But by leaving a gift to a charity in your Will, that gift is not subject to Inheritance Tax, so could reduce the taxable value of your Estate.
In addition, if you leave more than 10% of the total of your Estate to charity, your Inheritance Tax rate will be reduced from 40% to 36%, which is a significant saving.
2020 has been a unique year. During the pandemic, charities have had to cancel fundraisers and events, meaning they have missed out on a lot of donations and cash flow. But, statistics show that the Covid-19 pandemic has positively affected charitable gifting in Wills. It’s been reported that over £35 million of donations were left to charities in Wills in April alone. This was a huge increase on the £4 million monthly average and has been welcome news for charities across the UK.
What Can You Leave to Charity in Your Will?
You can either:
- Leave a sum of money
- Leave specific items or assets
- Name the charity as a Residuary Beneficiary (they will receive a specified percentage of your Estate)
Although charities are grateful for any gift, it’s always best to speak to the charity to make sure that they can make the most of what you are planning to leave them.
How Do You Leave a Gift in a Will?
It’s easy to do. You can either:
- Name the charity or charities in your Will, or
- Ask your beneficiaries of your Will to decide which charity to gift your legacy to
If you decide to let your beneficiaries choose where your legacy is gifted, it’s important that you make your wishes clear. You can do this by either making a list of charities for them to choose from or ask them to donate to a particular cause – this could be cancer research or animal rescue charities for example.
To make sure your wishes are followed, and to leave a gift to a UK based charity, you will need to include:
- The charity name
- UK Address
- Registered Charity number
This will make sure that the right charity will get your legacy and there is no chance of a dispute happening.
Remember a Charity 2020
Remember a Charity has been looking at how leaving a gift to charity when making a Will can have a positive impact on you, your family and your chosen organisation.
Director of Remember a Charity, Rob Cope, is sensitive to the current Covid-19 pandemic and has said how important this year’s campaign is to charities. “Legacy giving is likely to be one of the most critical channels for the sector’s recovery”
Writing your Will is a flexible process that can be adapted to suit your unique circumstances. No matter how big or small, any gift is appreciated.
If you want to make a Will and leave a legacy to a charity, or update your existing Will, speak to one of our specialist Wills and Trusts Solicitors for advice today.
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