Leaving money to charity in your will
Remember A Charity in your Will Week 2018 is underway and a good reminder to take action if leaving money to a charity if your goal.
A recent major survey into death, dying and bereavement, carried out by Co-op Legal Services, found that 68% of adults in the UK don’t have a will in place.
This statistic, whilst concerning from a financial planning perspective, isn’t particularly surprising. Reluctance to write a will is common-place, for a variety of reasons, some valid and others less so!
Despite some beliefs, writing a will is not going to result in you dying; that’s inevitable anyway, I’m afraid to say!
For those who have written a will, a large number decide to make provision for charities.
Different research from Co-op, based on their internal business data, found that the financial value of gifts being left to charity has risen by 30% during the last year.
Gifts made to charities in wills are a vital source of funding, with Cancer Research UK staying these legacies represent their single biggest source of fundraising income.
In addition to finding a rising amount of money left to charities in wills, Co-op’s business data also found that people are leaving gifts most frequently to charities tackling cancer.
Animal charities are also a popular recipient of gifts in wills, with nearly a quarter of legacy gifts being left to this type of charity. This has risen by almost 10% in the last year.
Another popular direction for charitable legacies is giving back to local communities and causes. More than one in ten legacy gifts made this year were pledged to local charities.
The business data from Co-op is showing that personal items, including houses and works of art, are being left to charities along with money.
James Antoniou, Head of Wills for Co-op Legal Services said:
There is certainly still a desire for clients to leave charitable gifts of all types in wills, for a variety of personal reasons and this is something that the charities heavily rely on. We work with a number of large and smaller charities offering affordable will writing services to their supporters to make this possible.
Rob Cope, Director of Remember A Charity, commented:
We hope this year’s Remember A Charity Week will encourage people across the UK to consider how they can pass on something wonderful and to make a real impact. If everyone left just a small amount to good causes, once they’ve taken care of loved ones, it could make an enormous difference for future generations.
According to Co-op Legal Services, there are five main things to consider when leaving a gift to charity in your will.
1. What should you consider when choosing a charity?
There are no set rules to follow when choosing which charity or charities a person would like to benefit in their will. Typically though, people are either passionate about a particular cause or they have been impacted either directly or indirectly in some way by the charity’
2. Are consumers taxed on the money they leave to charity?
Generally speaking, a gift to charity in someone’s will is exempt from Inheritance Tax. However, anyone considering doing it needs to ensure that the charity is a qualifying charity. This can be confirmed by asking the charity for their tax exempt reference number.
3. Is it just money that can be left to charity or can other personal belongings be left instead?
It’s possible to leave anything that’s in a person’s estate to a charity including their property, land, shares or a specific item such as an item of jewellery or a piece of art for example. If you would like the charity to use the inheritance for a particular purpose then you should discuss this with them in advance to make sure it’s feasible.
4. How many charities can someone leave a gift to?
There isn’t a limit on the number of charities a person can leave a gift in their will to. However it is important to consider which items or the amount of money they would like to give to each charity.
5. Is there a set list of charities which people need to choose from?
Anyone thinking about leaving a gift to charity in their will can visit the Charity Commission’s website for a full list of all charities registered in England and Wales.
If you’re thinking about writing or updating your will, or leaving a legacy for a favourite charity, then do talk to us about how these plans fit into your wider financial planning.