As we here at Rowberry Morris gear up to officially mark the annual ‘Remember A Charity Week’, it’s important to reflect upon why leaving money to charity in a Will is such a valuable, selfless and compassionate act to undertake, especially given the impact that events of the last year have had on the Third Sector.
Here we take a closer look at how you can get involved to ensure that your Will leaves a lasting legacy that you can be proud of.
What is ‘Remember a Charity Week’?
Running from 6 – 12 September 2021, ‘Remember A Charity Week’ aims to raise awareness of the benefits of leaving a financial gift to charitable causes in your Will. It simply asks people to consider making minor amendments to their existing Will, or to add a clause into a new one, that will see money being left to a charity that is close to that person’s heart.
Why is leaving money to Charity in a Will important?
Back in 2018, over £3 billion was donated to the third sector through provisions made by thoughtful folk leaving money to charity in a Will. But after a challenging 18 months where an estimated 41% of us saw a decrease in our disposable income primarily due to the impact that the pandemic had on our work lives, this has decreased significantly.
In fact, 53% of charities said that they had noticed a massive drop in donations overall since the beginning of the crisis, with 29% predicting that they might have to close their doors altogether if the situation didn’t improve within the next 12 months.
Of course, we all like to hope that we will never need the support of a charity, so the plight of these organisations is something that has gone largely overlooked in recent times. But with an aging population and an under-pressure NHS affecting both our physical and mental wellbeing, chances are that at some point we will look to charity for help – be that for ourselves, our friends, or our families.
Whether it’s life-saving clinical research, supporting disadvantaged youngsters, or rescuing neglected pets, charities play a vital role in driving positive change. And although we may not feel financially able to contribute to their continuation right at this moment in time, what we can do is look to the future and consider how leaving money to charity in a Will may indeed help to provide adequate assistance for the next generation to lean upon.
In fact, many philanthropic organisations wouldn’t survive without those who choose to leave money to charity in a will so ‘Remember a Charity Week’ serves as a stark reminder that you can make a difference to good causes, even in the event of your death. After your loved ones have been financially taken care of out of your estate, leaving money to Charity in a Will ensures that their important work is able to live on.
How does leaving money to Charity in a Will work?
If you wish to make a charitable donation upon your death, the exact amount you wish to leave, or the way in which an amount should be arrived upon (e.g., a certain percentage) must be clearly stated within your Will.
The key methods for making a charitable donation in your Will are:
- Residuary legacy: The amount left over once all other bequests to loved ones have been made and all other expenses or taxes have been paid.
- Pecuniary legacy: A specific amount of money that is to be left to a particular charity or charities.
- Specific legacy: Gifting a particular item such as stocks and shares, land, property, or even a Life Insurance pay out.
- Contingent legacy: Leaving a charitable donation only if another event does or doesn’t occur prior to your death. For example, if one of your beneficiaries dies before the Will is executed, their portion of your estate could be gifted to your chosen charity instead.
First and foremost, obtain sensible valuation of your estate as this will probably help you to decide which method of donation you wish you make. After that, you will need to source the address and registered charity number of your chosen charity from the Charity Commission’s website. Many charities have similarly worded names, so it’s important that you get their registered details (such as their charity registration number) correct to ensure that your money is donated to the right charity.
A qualified solicitor or professional Will writer will then ensure to include these details within your Will on your behalf.
How much does it cost to get a Will?
The cost of a Will varies on the type of Will, the amount and value of possessed assets, and the complexity of the estate.
For example, a Single Will with nominal assets could cost as little as £350.00 plus VAT. Whereas a Will that would shield the bequest of your assets until certain conditions are met, where there are children from a previous marriage or there are complex circumstances where a specialist Will is needed might cost closer to £600 plus VAT.
What are the different types of Will?
Single Wills – Written for a singular person, regardless of their relationship status. This Will is unique to them and references only their individual assets rather than those of their partner.
Mirror Wills – Joint Wills for couples who have similar wishes. Although couples do not have to be married to have a mirror Will, they should both agree on the key points, so that the contents of each Will match each other (except for the person named on each document).
How do you update an existing Will if you want to leave money to a Charity?
Making a small amendment, such as leaving money to Charity in a Will, can sometimes be done by adding a codicil to your existing Will.
A codicil is like adding a legal “P.S.” to your Will. It should outline any changes or additions to the existing document before being signed and witnessed as per the original Will, then kept alongside it to ensure both documents are read and interpreted together in the event of your death.
Alternatively, you could revoke the old will and make a new one – thus reducing the possibility of any confusion that could come from translating a codicil add-on. However, this option may cost you more.
Are donations to charity in a Will tax free?
Another benefit of leaving money to charity in a will is that the gift is free from Inheritance Tax.
If your estate is liable to Inheritance Tax it may also decrease the rate of IHT you pay. If you gift more than 10% of your estate’s net value to charity, the IHT rate will shrink from 40% to 36%.
If you are considering leaving money to charity in a Will, Remember a Charity Week is the perfect time to get in touch with the Wills and Probate team here at Rowberry Morris. They will happily guide you through all your options, and make sure that your last wishes leave a lasting impact.