Time spent with family and friends over the festive period can make you realise how precious life is and the importance of ensuring that those you love and care about are provided for when you die. Among those you wish to benefit from your will may be a charitable organisation, but occasionally leaving gifts to charity can be controversial, particularly if substantial sums are involved that members of your family might expect to receive. Pam Briscoe, wills and probate specialist with Mooney Everett Solicitors in Ormskirk, Lancashire offers her top five tips on this delicate subject.
- Decide what you want to leave
Making a gift to charity, known as leaving a charitable legacy, can be done in one of three ways:
- by leaving a specific sum of money (a pecuniary legacy);
- by leaving specific items, such as property, furniture or jewellery (a specific legacy); or
- by leaving some or all of what is left after the payment of funeral expenses, any debts you owed at the time of your death and any other specific gifts you wish to make (a residuary legacy).
You will need to decide what sort of legacy you would like to leave, the amount you would like to give and how you want to leave it.
Depending on the value of your estate, there may also be tax considerations that need to be considered. For example, if you will leave an estate worth more than the level at which inheritance tax becomes payable, making a gift to charity could be a useful way of reducing or even eliminating your liability to pay this tax.
As a general rule, gifts to charities are exempt from inheritance tax and if you leave more than ten per cent of your estate to charity, the rate at which inheritance tax must be paid on the remainder of your estate will be reduced.
- Avoid DIY wills
Although DIY wills are readily available, using one could be problematic if you want to make a gift to charity. With a DIY will the onus is on you to make sure that all the legal requirements for making a will are complied with, including the need for your signature on the will to be witnessed, ideally by someone with no connection to the charity you wish to benefit. DIY wills are more susceptible to challenge by family members who may be concerned about the possibility that you were pressurised into making a charitable gift, particularly if you were not known to be an avid supporter of the charity in question during your lifetime.
- Take care with ‘paid for wills’
Many charities organise ‘free wills weeks’ with solicitors, which are a great way of getting a professional will prepared. However, care needs to be taken if a charity offers to pay for you to prepare your own will. While there is nothing wrong in them doing this, they should follow the advice of the Charity Commission by still suggesting that you appoint an independent solicitor to prepare the will on your behalf and to explain to you how any gift you choose to leave to charity will impact on the inheritance you can leave to your family and other loved ones.
- Be clear on your chosen charity and purpose
To ensure your gift goes to the correct charity, it is important that your will includes details of your chosen charity’s registered name and address and, if they are a company, their charity registration number. Confusion, and therefore the potential for argument, can arise where this is not done and only a general description is given. For example, if you say you would like to leave £10,000 for cancer research, does this mean that the money should go to Cancer Research UK, the Institute of Cancer Research, Macmillan Cancer Support or some other charitable cancer organisation?
You also need to confirm whether you are happy for your chosen charity to use the legacy you leave them for their general charitable purposes or if you want it to be used for a specific purpose, such as training, research or respite care.
- Speak to a solicitor, particularly if you want to amend an existing will to leave a charitable legacy
An existing will which does not provide for a charitable legacy can be dealt with in one of two ways: it can either be cancelled and a new will prepared in its place, or it can have what is known as a ‘codicil’ attached to it which has the effect of varying the will to accommodate the charitable gift you now wish to make. Codicils are a legal document and therefore, like a will, they need to comply with certain legal requirements.
Your solicitor will be able to advise you on the best approach to take and to answer any other questions you may have.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.