There can be a number of reasons why you may decide to leave gifts to charity in your Will. This may be that you want to leave something to a cause that is close to your heart, ensuring that a local project can survive in the long term and other reasons.
Gifts to charity are exempt from Inheritance Tax and if you leave 10% of your estate to charity, there can be a reduction in the rate of Inheritance Tax that applies.
Deciding which charity or charities to leave your estate to can be a surprisingly difficult choice. This can sometimes depend on events that may have happened in your own life or the lives of your friends and family. You may also be involved with local charities or received support from a charity at a difficult time.
Gifting legacies or part or all of your residuary estate to a national charity tends to help very broad and larger causes, such as research into particular illnesses or support for people and their families with particular disabilities. Local charities may focus their attention on more local causes. You may find for example, that a gift in your Will to a local charity directly funds a particular project. That is not to say that gifts to national charities can have the same effect. Many charities find that the majority of their overall funding comes from gifts in Wills.
When you have chosen a charity or charities that you would like to benefit from your estate, you may also consider whether you would like the gift to be used for general charitable purposes or if you would like the gift to be used for a specific purpose. If you are specific in the purpose of the gift, it may mean that your vision of what you would like to see the money used for is more likely to come true. However, “ring fenced” funding can have its difficulties for charities, both locally and nationally as they may find that their core funds are low if there are too many specific funds, making it difficult for the charity to balance the books in the longer term.
Our Private Client department is happy to discuss any thoughts you have regarding how you would like to leave your estate. Reviewing your Will at least every five years is as important as making your first Will. Please contact us for more information, including our fees and to book an appointment.
20 West Street