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BLOG: Leaving a charitable legacy – avoid the confusion

Emma Myers
Written By:
Posted:
25/06/2014
Updated:
25/06/2014

Leaving money to a charity in a will has never been more popular.

According to recent research, half of us are planning to leave a charitable legacy when we die, with over 40% of those planning to leave a substantial sum of £1,000 or more.

Although leaving money to a charity is a commendable act, it can be more complicated than first thought.

Our research found that more than eight in ten of us will leave a fixed sum of money to a charity, yet this doesn’t take into account changes in the value of your estate between when the will was written and when it comes into effect.

For example, if the value of the estate is reduced, the amount owed to charity remains the same meaning other beneficiaries and loved ones could be left with significantly less than expected.

If not planned properly, a simple act of generosity could have serious implications for your loved ones once you’re gone. All wills are made public after death and some charities check the Probate Service to locate any assets owed to them before proactively working to collect them. At an emotional time, this is a potentially distressing situation for next of kin who may be contacted for the bequest before the deceased’s affairs have been put in order.

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To help ensure you leave a charitable legacy in the way you want, we have created these top tips to guide you through the process:

1. Leave a set percentage of the net value of your estate to a charity. This will protect your other beneficiaries’ inheritances if your estate is reduced between now and when you die.

2. Don’t specify which charity you want to leave money to in your will. Specify it in a Letter of Wishes instead as this will provide more control.

3. Consider how a charitable legacy might affect your tax position. Leaving a little more than you plan could reduce the rate of inheritance tax you pay.

4. Ensure you talk your decision through with your family. This will avoid disputes and legal wrangling after you’re gone.

5. Pick your executors carefully. This will help to ensure your wishes, including the charitable legacy, are carried out in the way you intended.

6. Seek legal advice from an expert if you are planning to update your will. The easiest way to do this is using a legal document called a Codicil.

7. Review your will regularly and update when necessary. Changes to personal circumstances, fluctuations in the size of your estate and the status of your chosen charity are all reasons to review your will.

Emma Myers is head of wills, probate and lifetime planning for Saga Legal Services