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What will your legacy be?

Sun, 2015-01-25 13:57 -- contenteditor

Many people support a charity close to their heart during their lifetime, whether that be through voluntary work, raising money by doing a sponsored activity, buying something at a cake sale, or by making a donation.  However, many of those who support a charity during their lifetime don’t know that they can continue to support a charity on their death through their will – this is called a ‘charitable legacy’.

The new year is a time when people make resolutions, set goals, and review their financial position and their wills.  The review of a will should take place annually to ensure it reflects its maker’s personal and financial situation, and takes account of any changes that have occurred during the preceding year.  Also, the review should look at whether the structure of the will ensures excess inheritance tax isn’t payable on death, and in appropriate cases that family members are protected from the future misapplication or dissolution of assets.  A review is best done by consulting a specialist solicitor, with minor changes being effected by way of a codicil, and more complex changes being effected by a re-drafting of the will.

When reviewing or making a will it is a good time to think about leaving a gift to charity.  This can take the form of specific items, a defined amount of money, or a share of what’s left when other gifts have been given out.  Anyone can leave a legacy to charity and there is no minimum or maximum value of the legacy.

Inheritance tax is set at 40% and applies to the value of your estate above the ‘nil-rate band’ (the tax free allowance on death of £325,000 that everyone is entitled to, rising to £650,000 in certain circumstances).  The good news is that inheritance tax is not payable on gifts in your will to charities – they are tax free.  In addition, making gifts to charity in your will can also be used as a way of reducing the rate of inheritance tax payable.  Where someone leaves 10% or more of their estate to charity then not only will that legacy be tax free, but the rate of inheritance tax payable on the part of their estate not left to charity is reduced to from 40% to 36%.

It is important that gifts to charities in a will are carefully drafted to ensure there is no ambiguity as to the charity that should benefit, to ensure the gift doesn’t fail for ambiguity or because it is too prescriptive, and to take into account what happens if a charity ceases to exist or becomes part of another charity.

Charities rely on the generosity of the public who believe in the causes they support, and charitable legacies are an important part of that support, raising 15% of all voluntary income each year. 

The Pinewoods Conservation Group is pleased to be working with Stowe Family Law in promoting charity legacies. If you require any further details or would like to make a legacy to The Pinewoods Conservation Group or any other charity then please contact your solicitor or Duncan Watson Solicitor of Stowe Family Law LLP on Tel: 01423 532600 or via Duncan.Watson@stowefamilylaw.co.uk

 

 

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