The process of making a will is something that is so often overlooked or put off until it is too late.
It is not surprising at times, particularly when you ask yourself the question ‘why would I want to think about my death?’ when at an age where you might still feel energetic and healthy.
When the time is right, the process is one that you will be thanked for - and indeed thankful for yourself - when the real benefits after you are gone are learned. Apart from it being a positive gesture, those who include a ‘legacy’ charity donation in their will can also soften an additional burden that comes following your death.
As the famous quote goes: “only two things in life are certain: death and taxes”.
If you are worried about the Inheritance Tax that might have to be paid when you die, leaving a gift to charity can in fact reduce the bill. Leaving a part or your entire estate to charity can reduce and even cancel out the Inheritance Tax liability, as a donation in your will does not count towards the total taxable value – known as a ‘charitable legacy’.
You can also cut the Inheritance Tax rate on the rest of your estate from 40% to 36% if you leave at least 10% of your ‘net estate’ to a charity.
Of course, what is there to stop you from donating right away? Cash donations or anything you own again are not counted as part of your estate after your death. Again, Inheritance Tax could be cut or even eliminated by this gesture. There could also be some relief from Income Tax when you donate to a charity while you are still alive.
Nicola Dalzell, Partner and Head of Wills at Tilly, Bailey & Irvine, said “leaving a legacy to a charity close to your heart helps that charity carry on their amazing work and from a tax point of view, leaving a legacy to a charity helps mitigate inheritance tax.”
The UK is well known for its generosity. Almost £10billion was donated to charity last year alone, £2.8billion of that courtesy of people leaving money to a cause in their Will. Despite this and over 35% of over-40s in the UK saying they would give a small amount of money in their Will, only 6.3% actually go through with that promise.
Talk through your intentions with your family to ensure no heartache occurs in the distant future when everything plays out. If a charity is concerned, this is also the time to explain to them how proud you are of this donation, and explain to others close to you just what they can do to help.
If you want to make a difference, don’t hesitate to contact Tilly Bailey & Irvine’s wills and probate solicitors in Teesside from offices in Stockton, Hartlepool, Wynyard or Barnard Castle on 01429 350062.