Charities rely on legacies for much of their funding and many of us want to leave money to good causes that have helped us during our lifetimes. But which is the best way to leave money to your chosen charity?
Many charities receive a high proportion of their income from gifts given to them via Wills. Supporting those which are close to our hearts or which have made a difference to our lives helps them to continue doing important work.
Including a charity in a Will is the best way to ensure that they benefit after someone’s death. When naming a charity in a Will, ensure that its correct full name is used together with its registered charity number and registered address. A merger clause should be included in case the organisation merges or ceases to exist – in which case a well-drafted Will allows the legacy to go to a different charity that has similar goals.
There are three different ways to leave a charitable gift in your Will:
1. A pecuniary legacy
This is a specified amount of money and will be paid before distribution of the residue of an estate. For example, £5,000 to Charity X and the residue split between named family members will mean that the £5,000 will be paid first, then the rest of the money divided.
It is possible that those receiving the residue may end up with less than expected if the estate is smaller than anticipated, perhaps, for example, if it has been depleted by payment of care home fees.
2. A specific legacy
If something other than money is left, for example property or shares, then this is called a specific legacy.
3. A residuary legacy
This is a share of what remains of the estate once all debts and gifts have been paid.
Other benefits to leaving money to charity
In some cases, leaving money to charity can reduce the Inheritance Tax liability of an estate. Take advice from The Fry Group’s estate team to ensure you understand the implications of leaving money to a charity and that your Will does exactly what you want it to. A poorly drafted Will can cause problems and expense for those left behind.
To speak to an expert about your Will, please contact Steve Wright on 01903 231545 or email email@example.com.