Today is #World Kindness day so we are looking at leaving gifts in your Will to charity.
Recently the Law Society’s Solicitor Chat covered Wills and leaving gifts to charity. Here is a summary of the main points to consider and how JW Hughes can help you with the decisions you wish to make when including a donation to charity in your Will.
What are the benefits of leaving a gift to charity in your Will?
Leaving a gift to charity in your will allows you to support a worthwhile cause, which is likely to rely on this type of donation to continue their work. In addition to helping a charity, if you leave at least 10% of your estate to charity, your estate will benefit from a lower rate of Inheritance Tax. Any gifts given in your Will to a charity will not be subject to Inheritance Tax. Our solicitors will be able to provide more details about Inheritance Tax based on your specific circumstances.
What types of gift can you leave to charity in your Will?
There are several types of gifts you can leave to charity in your Will, such as:
A financial gift of a specific sum of money.
A specified personal item, such as a piece of jewellery or artwork.
A share of the remainder of your estate, known as the ‘residue’ – this is the sum left in your estate after the payment of all expenses and when any other specific gifts stated in your Will have been paid.
In addition, you can also consider stating that a preferred charity could benefit from a house clearance. This will allow your executors to donate your personal and household items to a charity rather than them simply being discarded or thrown away.
Can you specify in your Will how you wish a charity to use a specific gift?
It is possible to specify in your Will how you wish a charity to use the gift but if the charity is unable to follow these requirements then the gift may fail, which can cause complications in the administration of your estate. Alternatively, you can include a request in a letter of wishes asking the charity to use the gift in a certain way. This is not legally binding, but it does mean that the charity will still be able to accept the gift even if they are unable to meet your requirements and they will be aware of your wishes.
What happens if your gift to charity is challenged? Is there any way to avoid this happening?
If your gift to charity is challenged by another party, the charity would have a duty to defend it, which may lead to additional legal fees. Therefore, it may be wise to discuss the gift that you wish to make to charity with your family, so they are aware of your intentions. If the gift is substantial and you are choosing not to include your relatives in your Will, you could also include a side letter explaining your reasons for doing so. If a person then tries to challenge the gift, the side letter is further proof that your intention was to include the gift in your Will, and this would be considered in court if necessary.
Our experienced lawyers will be able to advise you on your particular circumstances and take appropriate action to reduce the risks of any challenges to your Will by ensuring that it is properly drafted. They will obtain any medical reports that may be required and consider any other potential claims against your estate.
Do gifts to charities outside the UK differ to those located in the UK?
If donating a gift in your Will to charities in the EU, Iceland, Norway or Liechtenstein you can still receive the same Inheritance Tax benefits as you would if donating to a charity located in the UK. Outside these areas, gifts will not receive Inheritance Tax benefits. In addition, donations outside of the UK will not benefit from Gift Aid, which enables the charities to reclaim an extra 25% in tax on each donation made by a UK taxpayer. However, after Brexit this could change. Therefore, it is important to take extra care when including international charities in your Will and one of our experienced solicitors will be able to advise you on this.
How can we help you to leave a gift to charity in your Will?
By speaking one of our solicitors, you will receive expert legal advice tailored to your needs and you can discuss any Inheritance Tax advantages specific to your circumstances. If there are any later challenges against your Will, your solicitor can give evidence of the discussions you have had with them which could help to settle disputes in a timely and cost-effective way.
We can check whether the charity’s branch local to you has its own charity number and, if so, make sure the gift goes to that branch if you wish. We can make sure that the charity’s correct name is used in your Will and can include provision for the charity changing its name, so the gift does not fail. If the charity has preferred wording, we can also make sure this is used, giving you peace of mind that your wishes are in place and will be carried out properly in the event of your death.
If you would like to make a Will or update your current one, please contact us on Llandudno 874774 or Conwy 596596.
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