Last year the business woman Doreen Lofthouse, who had made a success of the Fisherman’s Friend cough sweets, left a headline-grabbing £41million to a charitable trust to benefit her home town of Fleetwood in her will.
The Charities Aid Foundation estimates that over £11 billion was given to charity in 2020, with one in 20 (5%) people saying that they have included a charity in their will, and a further 3% saying that they are ‘very likely’ to do so because of the pandemic.
Leaving a legacy to charity is a popular way to support the causes that are important to you, without dipping into your financial reserves while you might still need them. It also provides an opportunity to reduce the amount of inheritance tax which will be payable on your estate after you have died.
Depending on your personal objectives, you can leave instructions in your will in a number of ways, including:
- specifying a one-off large gift of a certain sum;
- leaving your entire estate;
- specifying a percentage of your estate; or
- creating a charitable trust.
A gift may be something which generates income, such as a property or a creative work. For example, Great Ormond Street Hospital was gifted the rights to the children’s book Peter Pan by the author J M Barrie.
It is important to be careful in the wording of your will to ensure that the details of the beneficiaries are correct – as some large charities have subsidiaries and trading divisions. Also, you will need to think about what would happen to the money if that charity was no longer active.
Another key consideration that your lawyer will wish to discuss with you will be the impact on any family members and whether they might feel disadvantaged as a result of your generosity. It is not uncommon for dependants to challenge a will if they have been counting on an inheritance, especially where a child has been excluded or if someone with care needs has not been provided for.
The courts will consider inheritance claims by adult children, and so you will need to think carefully about any decisions which you expect may be unpopular.
For further information on making a will, please contact Cerrig Parr, a partner in our private client team in Heathfield, East Sussex on 01435 890 101 or email cerrigparr@hugheslaw.co.uk.
This article is for general information purposes only and does not constitute legal or professional advice. Please note that the law may have changed since the date this article was published.