Should I Leave Money to Charity in My Will?

Writing a will can be one of the most important things you can do for your loved ones, but did you know that leaving money to a charity in your will is also a great way to leave behind a positive legacy? It’s not only an opportunity to give back and help those in need, but it can reduce your inheritance tax bill too, making it well worth considering.

To help you decide whether you should leave money to charity in your will, we cover everything you need to know:

What are the Different Types of Legacy you can Leave to a Charity?

There are various things that can be left to charity in your will, such as a fixed sum of money, a specific asset (like a property or a shareholding), or a percentage of your residuary estate (what is left of your estate after other specified gifts, costs, and tax are deducted).

If you struggle to chose a type of gift to leave to a charity, it might be best to consider what type of legacy the charity would benefit from the most.

How to Leave Money to a Charity in Your Will

In regards to leaving money to a charity in your will, there are two ways to go about it:

1. Specify a named charity or charities – if you do, include their registered charity numbers to avoid any confusion as their names can often change.
2. Let the trustees choose the charity or charities – leave clear instructions of your wishes to help them make a decision. For example, you may want to specify the type of gift you wish to leave (e.g., a cash sum, asset, or share).

Whichever route you decide to go down, there is a relative amount of flexibility. You can leave a cash gift in your will, donate a specific portion of your estate, or ask for the remaining assets to be paid to charity once the beneficiaries have gotten their share.

Can I specify how a charity should use my money?

Yes, you can state how you want a charity to use your donation, but it is best to discuss your wishes to the charity instead of leaving instructions in your will without consulting them first. A charity could potentially refuse your gift if they can’t meet the conditions set out in your will.

How Do Charitable Gifts Affect The Amount Of Inheritance Tax My Estate Will Pay?

One of the key benefits of leaving money to a charity in your will is that they can reduce the amount of inheritance tax that the rest of your estate will pay. If you leave at least 10% of your taxable estate to charity, the inheritance tax rate for the remainder of your estate lowers from 40% to 36%. This means that every £100 that is given to charity only ‘costs’ your estate £24, leaving more for your beneficiaries overall.

There are factors to bear in mind though, such as how much your estate is worth and the size of your donation. If you are considering donating to charity for the purposes of reducing inheritance tax, you should always seek professional advice first.

Could Your Gift Cause a Legal Dispute?

It is important to carefully consider whether leaving a donation to charity could cause family disputes after your death.

Certain people can dispute your will under the Inheritance Act if they believe that you didn’t leave sufficient financial provision for them. People permitted to make a claim are family members, anyone you have cohabited with for over two years, or someone who was financially reliant on you.

For this reason, if you want to leave a gift to charity, make sure also you leave a reasonable amount of your estate for any financial dependents to avoid a family dispute.

How Legacy Wills and Probate Can Help you Include a Donation to Charity in Your Will

Legacy Wills and Probate is a leading provider of online will writing services. For legal advice on the best way to leave money to charity and for long-term professional support, don’t hesitate to get in touch today.

Call our friendly team on 0333 344 4325, or email us directly at sales@legacywillsandprobate.com, and we’ll get back to you as soon as possible.