Although for most of us there is truth in the saying that “Charity begins at Home”, many of our clients choose to benefit a charity on their death, whether by leaving a cash legacy, a share in their residuary estate or simply by letting their loved ones know that they would prefer a memorial collection to a worthy cause rather than an elaborate floral tribute. For a small charity, in particular, a significant gift in a will can make a massive difference and ensure their survival for several years to come.
We recently administered an estate where our late client had left the bulk of his assets to several environmental charities about which he felt passionately, including the Jacques Cousteau Foundation which carries out research into the effects of mankind on the oceans. I worked closely with their chief financial officer over many months and he was lost in gratitude for the unexpected legacy which would enable them to refit their famous survey vessel “The Calypso” and keep her running for several years. In his words, a gift like this is “Manna from Heaven” for an organisation that rarely has the capital it needs to embark on substantial new projects.
As well as the feeling of philanthropy, there are also significant tax incentives to encourage charitable giving. Any sums given to charity by will are exempt from inheritance tax. There has also been a recent change in the law intended to encourage charitable giving in Wills. Although the calculations can be rather complex, broadly speaking if you give more than 10 % of your total estate to charity, any inheritance tax on the rest of your estate would be charged at 36% rather than the usual 40%.
It is also worth bearing in mind that if the gift is made during your lifetime it may well benefit from Gift Aid which greatly increases the worth of the gift to the charity. Having said that, most feel more inclined to be charitable once we can be sure we have no further need of the money ourselves!
The main concern of someone making their Will is usually to make sure that their nearest and dearest are provided for but it can also be a valuable opportunity to do a little in the world as you leave it and even the smallest bequests are very gratefully received.
For further advice on Wills or charitable giving please contact Liz Heron.