What is a legacy and why are they important?
While everyone wants to make sure their loved ones are looked after when they’re gone, actually confronting that issue and making plans is something that people generally tend to shy away from. The latest figures from Smee & Ford support this, telling us that there were just over 73,000 absolute bequests (legacies actually received by charities) left last year.
In the UK, legacies can be separated into three categories:
- Pecuniary – a fixed sum of money;
- Specific – individual possessions; and
- Residuary – a percentage of the net value of an estate.
Gifts in wills, also known as legacies, are a really important source of income for charities in the UK. They tend to be of a higher value than one-off donations and also help charities with their long-term planning, especially if they’ve been notified of intent beforehand.
Supporting your chosen charity during your lifetime is one thing, but making a statement that you’re going to support them afterwards can really deepen the bond between you and your cause.
A large proportion of people in the UK haven’t written a will which could result in our loved ones not receiving anything after our death. If someone dies intestate (without having written a will), the estate is divided up according to preset rules enforced by the government. This may mean that family and friends – and of course any supported charities – miss out entirely.
Death and taxes
When writing a will, it is important to note any inheritance tax rules and what this means in terms of any gifts left to family or friends. The government has introduced tax breaks for people leaving a certain percentage of their estate to charity. For more information on inheritance tax respites when leaving a gift to charity in your will, please refer to Dawn Moir’s article in the Gifts in wills section of the website – “Tax benefits of leaving a gift in your will”.
Once the decision has been made to write your will, there are still a number of other issues to address, not least of all who the beneficiaries are. A solicitor will be able to help you with the legal aspects of writing a will – to find a solicitor in your area, visit search4solicitors.com.
For those that choose to leave a charitable gift, there are a few campaigns that can help point you in the right direction:
Will Aid, takes place every November, and because it only runs for one month a year, has a straightforward payment process, and the solicitors involved are doing their work for a good cause, it has significant uptake – the scheme raised a total of £5.5 million in legacies for charities in 2010.
Free Wills Month (FWM) runs every March and October and encourages those aged 55 and over to update their wills or write new ones free of charge.
Sealing the deal
Changes can be, and often are, made to wills all the time. If you wish to add a charity to your will, you can either write a whole new will, or you can add an attachment to your existing will – known as a codicil. Alternatively, if you’re not ready to make the decision in legal terms, but know that you do want to leave something to charity in your will, you can fill in a pledge form which will notify your chosen charity of your intent of continued support. Both forms can be downloaded from the Charity Choice website, in the Gifts in wills section.