What's the best way to leave a legacy in a will for conservation causes?
Daphne and Robin J, by email
I must state from the outset that I see little point in me expressing which conservation causes I think someone should choose to support in their will. Such decisions are highly personal and each of us will have equally valid reasons why one charity should be chosen over another. My love of, say, rare bats can probably be trumped by your love of, say, rare sea birds. We're going to go nowhere fast with that sort of debate.
For example, Teratornis mentions supporting any charity that works to rid the world of automobiles, smartse argues that renewable energy research is the best destination for your largesse, and davidsouthafrican believes that your money should go to supporting projects that curb human overpopulation and overfertility. I'm sure we could all argue into next week about which of these, if any, is the most worthy, but surely that decision has to be left the signatory of the will.
Instead, let's concentrate on making sure the charity, or charities, you wish to bless with your generosity get the best possible deal. I have, therefore, drafted in some expert help, as writing water-tight wills is not exactly my forte.
Gifts in wills are a vital source of income to today's charities. In the UK last year, just under £2 billion was left to charity. Some of Britain's best-known charities rely on legacy income to underpin their operations. For example, the Royal National Lifeboat Institution (RNLI) derives over half its income from bequests (the largest ones are fondly known as 'floating headstones'); while Cancer Research UK receives around £3 million a week in legacies…
Analysis of the legacy market shows that while pecuniary gifts [where the value of the gift is specified] are more common, residual bequests [where a charity receives a share of the final estate] are considerably more lucrative. Last year, the average pecuniary gift was worth £3,500; while the average residual bequest was worth £51,300! (Of course, this average includes a small number of very large bequests, which skew the figure upwards – a more 'typical' residual bequest would be £15-20,000).
Scott Devine, the policy and communications executive at STEP Worldwide, then issued the following general advice to anyone considering leaving a legacy to a charity:
The most important thing to consider when leaving a legacy to charity in a will is to have the will drafted by a properly qualified will draftsperson. The Society of Trust and Estate Practitioners provides details of solicitors who specialise in wills. Go to www.step.org or phone 020 7340 0500.
When leaving legacies to charity it is important to ensure that the testator's wishes are clearly understood by the will writer. As long as the testator's instructions are properly understood by the will draftsperson and the will is accurately drafted, there should be no problem with leaving legacies to charity if that is what the testator wants. Two recent high profile cases, both involving legacies to the RSPCA (Gill v. RSPCA and RSPCA v. Sharp), highlight that family members will challenge charities in court if they feel they are unfairly being overlooked for a share of the estate or that the will is not being interpreted as the testator intended.
Testators are advised to discuss their testamentary intentions with close family members if they plan to make little or no provision for them. If the testator intends a particular charity to benefit from his or her estate, he or she should explain why this is the case to avoid any misunderstanding upon death.
I also contacted Paul Sharpe, chairman of the Institute of Professional Willwriters, to seek his tips on leaving a legacy to a charity in your will:
1) Make a good will
Unless you make a will which is valid and correctly worded, charities cannot inherit a single penny from a bequest. So when making a will it's best to use a qualified will writing professional who knows the steps to take when considering a charity, no matter what the cause, in your will. Members of the Institute of Professional Willwriters and the Institute of Scottish Professional Willwriters (IPW and ISPW – www.ipw.org.uk) comply with a Code of Practice which has been approved by the Office of Fair Trading, meaning that consumers are safe in the knowledge that these code approved members operate to a higher standard of consumer protection than the law requires.
2) Act savvy
Many charitable organisations run promotions to encourage their supporters to make a will - with the hope that the charity gets a mention! These promotions can include discounted or even free wills. Remember a Charity is an organisation with 140 charity members, including conservation charities, which was set up to encourage people to include a charitable bequest in their wills. They are running the 'Remember a Charity Week' between 13th and 19th September 2010 in which participating members of the IPW and ISPW will be offering wills at 25% discount.
3) Get the details of the charity correct
There are many charities with similar names and objectives and if you get the name of the charity wrong, the charity could be disinherited. It is always best to confirm the correct name and charity registration number with the charity or look on the Charity Commission websites - for England and Wales http://www.charity-commission.gov.uk and for Scotland http://www.oscr.org.uk.
4) Don't be caught out by inheritance tax
The good news is that gifts to a charitable organisation in lifetime or on death in a will are usually exempt from inheritance tax. This certainly applies to all UK-registered charities, regardless of the cause, but can apply to other organisations as well. If your favoured charity is not a UK registered charity, its best to check with them whether a bequest to them would be exempt from inheritance tax.
All good advice, I hope. My only regret is that neither of these two professional organisations boasted a slogan as pertinent as this headline on a recent article about will-writing in Investors Chronicle: "Where there's a will, there's a way."
On 12 July, Leo originally wrote
From cat homes to hospitals, many of us prefer to choose a worthy cause over family members as the key beneficiary of the money we can't take with us when we go to the great compost heap in the sky. Charities have long fought for our attention when it's time for us to write our wills. Some now even have dedicated websites to make it all oh-so-easy for us.
What arrangements have you made, if any? Have you chosen to bless a conversation charity in your will? Is it better to leave a little bit to lots of charities, or funnel your funds towards one or two charities you are confident will make a real difference? And what are most tax-efficient ways to make a will?
As ever, I'll return on Friday to join the discussion.
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