There is nothing like a global pandemic to make us think about our own mortality.  The number of clients writing a will for the very first time – or reviewing the contents of wills from years gone by – has increased as a result.  People are reassessing plans for the future and making sure their affairs are in order.  This might be one reason for recent research suggesting that legacy giving to charities has increased by 56% in the last 12 months, and by 81% between mid-March and June this year.  

Future trends?

Research from Legacy Foresight shows total legacy income is expected to reach up to £3.8bn by 2024, although in the shorter term, the number of reported bequests is estimated to have dropped due to delays at the Probate Registry.  The impact of house and share prices is also having an effect on the value of charitable bequests.

Legacy income is crucial for charities at a time when other income streams are under pressure; gifts in wills make up about a third of a charity’s voluntary income according to Smee&Ford, and drafting a will is the only way to ensure a charity will receive such a bequest on your death.  It is a great way to leave a lasting legacy, and there are additional inheritance tax benefits if such a gift equates to at least 10% of your taxable estate.

What should you consider?

Some common considerations we might have when leaving funds to charity might include:

  1. Flexibility? Sometimes there can be a temptation to restrict how funds can be used in the future, but our experience in administering estates shows this can have unintended consequences and gifts might fail completely if the charity is unable to comply with the instructions you provide.  Perhaps consider providing some guidance to the charity on how to channel your legacy rather than being too prescriptive.

  2. Futureproofing your gift? Factor in the possibility that some charities unfortunately might not survive a further recession, or might merge with another charity in the future.  Ensure there are ways in which your legacy can pass to another charity with similar aims.

  3. Which charities? This is such a personal decision for individuals to make, and often clients leave money to charities they feel passionately about, or they (or their loved ones) have personally experienced in action.  Interestingly, local causes and community charities have seen a significant increase and are now the second most common type of charity for individuals to leave a legacy to after cancer charities.  If you are unsure of the specific charities, an option might be to leave funds in a charitable trust with guidance to your trustees on the types of organisations you would like them to support.

  4. How much?  You don’t know when you will die, nor how much your estate will be worth.  Any legacy will make a difference to the charity you support, but if you are concerned about fixing the amount, you might like to consider leaving a percentage of their estate or including a more flexible trust structure within your will.  Indeed, we often advise clients how to maximise their charitable legacy by taking advantage of the reduced inheritance tax rate and can talk through the available options.

We have a wealth of experience in advising clients on legacies and administering them in practice, and it is always advisable to discuss any changes to your will with a solicitor to help avoid disputes on your death and ensure your legacy has maximum impact.