The Season of Goodwill

How to Gift it: Charities and Wills

There are many very good reasons for writing wills – making things easier for your family, ensuring your assets are split according to your wishes and appointing competent executors are just some good reasons. Another important reason for making a will is to include gifts to charities. I recently received the annual report of the Community Foundation Tyne & Wear. I was interested to read how charitable giving is on the increase here in the North East. Such help is now needed more than ever in these difficult times.

Charity and philanthropy are important considerations in in making wills and perhaps also in lifetime gifts or transfers. I find when I speak to my clients that they like the idea of including charitable gifts in their wills and surveys have shown that will makers are up to 17 times more likely to benefit a charity after talking to professional advisor. Many cultures have a tradition of charitable giving and some churches encourage a voluntary “tithe” gift and in the muslin tradition, charity or “zakat” is one of the 5 pillars of Islam.

Gifting

Gifts to charities can be fixed sum legacies or percentage shares. There are advantages and pitfalls to both approaches and we have the experience to advise and help you decide what is best for you. In gifting a share of the estate rather than a fixed sum for example the charity may take a greater interest in how the estate is dealt with, property valuations and sales and so on. This can in a small number of cases cause friction with surviving family which will need to be managed.

In the UK the favourite charities tend to be medical research, animals and children followed by hospices and overseas aid. Most will select a charity aligned with their personal values. We know that all our clients have different backgrounds and so may have different aims and priorities.

If you want to help a good cause but cannot find a charity to suit you then you may be able to set up your own charitable foundation or donor advised fund. In the North East the Community Foundation based in Gosforth enables individuals and families to set up a “donor fund” to help favourite good causes. The fund operates like a personal charitable trust but without the costs and hassle of setting and running a charity.

Charitable giving in your will is a way to help your favourite good causes. If can also be tax efficient as gifts to charities are free of inheritance tax and in some cases your estate may qualify for a reduced rate of inheritance tax as a result. This would benefit your other heirs.

CONTACT

For help and advice on Wills and Property contact our specialist team on 0191 232 9547 or email hayley.baker@davidgray.co.uk