Many people choose to leave a gift to charity in their will, but did you know you can leave your entire estate to a cause you believe in?
Whether you want to support an animal sanctuary, a women’s charity or another organisation close to your heart, this approach can create a lasting legacy.
Martial arts icon Jackie Chan has famously pledged to leave his multi-million-dollar estate to charity, demonstrating the significant impact charitable giving can have.
To leave your entire estate to charity, you must include it in a Will that explicitly names the chosen charity and how much money you want to leave.
You should first work with a professional to include a residuary clause in your Will. This ensures that your entire estate will be left to your chosen charity after funeral costs have been paid.
There should be precise legal terminology in the Will, which will prevent confusion and any potential challenges from relatives who think they may be entitled to funds.
You must ensure you confirm the exact legal name of the charity and check their status via the official Charity Commission for England and Wales. This ensures that they are a legitimate charity, as they will be liable for Inheritance Tax (IHT) if they are not.
In your Will, you must also appoint executors. Individuals or professionals will manage your estate, pay off any debts or funeral costs and ensure that your wishes are carried out.
The Will should then be signed in front of two independent witnesses who must also sign the Will to make it legally binding.
Should you decide to leave an entire estate to charity, there should be some things that you think about first.
In England and Wales, if you leave an entire estate to charity, the full amount of the estate is completely exempt from IHT contributions.
However, if you choose to leave more than 10 per cent of your estate to charity, the IHT rate will reduce from 40 per cent to 36 per cent.
Another thing to consider is that if you have any financial dependants or family members who rely on you, leaving them completely out of the Will can sometimes lead to disputes.
Disputes over a Will can often be costly and time-consuming for families that are experiencing grief.
Therefore, it tends to be advisable to have a conversation with your family beforehand so they are not blindsided when the Will is read.
Choosing to leave your legacy to a charity is a noble decision to make. However, it is not one that should be made alone.
Our team of solicitors are here to offer support when you are drafting your Will and when you are choosing to leave any amount of it to a charity.
We can help you ensure that you are structuring your Will effectively so that all of your wishes will be honoured.
Choosing charitable gifting in your Will? Get in touch with our team for support.
