Leaving Gifts to Charity In a Will

 

Leaving a gift to charity in a Will an excellent way to help a good cause in your memory. Many charities rely on gifts to remain operational ~ The Royal National Lifeboat Institution derives arounf half its income from legacies and around £2 Billion was left to various charities in 2009 (Source: Society of Trust and Estate Practitioners)

All gifts to charity are tax free and, on top of this, if you leave 10% (or more) of your estate to charity the overall Inheritance Tax bill for the Estate is reduced by 10%, so leaving a gift to charity can not only help a good cause but help with efficient tax planning on top.

Many people have charities which they support in life and plan to leave a gift to in their Will. However these are some of the questions which I have come across:

What counts as a Charity?

At a basic level, any charity which is registered in England and Wales, so has a registered charity number from the Charity Commissioner, is eligible.

If you plan to leave a gift to a group, maybe your local walking group, which isn’t a registered charity but still a worth cause you should seek legal advice in case the gift would be invalid. However, most organisations of this sort are usually eligible.

You can leave a gift to an international charity, but be aware that this gift will be subject to Inheritance Tax if this applies to your Estate.

What sort of gifts can I leave to Charity?

You can leave anything you like!

The most common gift is a cash sum, but people have left art, valuable property and even houses to charity.

What if the Charity no longer exists or merges with another Charity?

This does not matter. Charities merge and rebrand fairly often, but so long as it can be traced the gift will go to the charity under the new name, or the merged charity. Age Concern recently became Age UK, but no gifts left to Age Concern will fail.

If the Charity disappears altogether the executors must donate the gift to a similar charity. If they cannot decide which charity to give it to the Court will decide for them.

Can I leave a general charitable donation?

It is always best to be specific about which Charities you wish to benefit. It means that the Estate is easier to adminstrate and leaves no room for ambiguity.

It is possible, however, to be more vague, but you should still define the charitable area you with to benefit and state that you leave it up to the Executors to decide the distribution.

e.g. “I leave the sum of £100,000 to charities concerned with the welfare of animals absolutely and my Executors and Trustees have absolute discretion to decide which charities are to benefit and in what proportion”

What if my family disagree with me leaving my Estate to charity? Can they contest the Will?

There have been a couple of high profile cases in the media recently (Gill v RSPCA and RSPCA v Sharp) where family members have contested a gift to Charity.

If the Testator’s wish is clearly written in a Will, preferably drafted by a regulated professional so that there is no doubt that the person wishing to leave the gift has been properly advised, the gift will more or less always succeed if there is a contest. The only time it will not is if there is a successful Claim under the Inheritance (Provision for Family and Dependants) Act, which are fairly rare.

It is also a good idea for the Testator to discuss this matter with their family so that they know that this is their wish.