The benefits of gifting to charity in your Will
The Benefits of Gifting to Charity
Including charitable gifts in your will is an increasingly popular choice among individuals who wish to leave a lasting impact on causes they care about. Whether motivated by personal values, a desire to leave a legacy, or financial considerations, making a charitable bequest offers numerous benefits for both the donor and the charity. Here, we explore the various advantages of gifting to charity in your will.
1. Creating a Lasting Legacy
One of the most compelling reasons to include a charitable gift in your will is the opportunity to create a lasting legacy. For many, the idea of contributing to a cause that is meaningful to them can be deeply fulfilling. It allows individuals to be remembered not only for their achievements and personal connections but also for their generosity and commitment to the betterment of society.
By leaving a gift to charity in your will, you ensure that your values and passions live on, supporting causes that matter to you long after you are gone. This could be anything from funding medical research, supporting educational initiatives, aiding environmental conservation efforts, or helping the less fortunate. The impact of your gift can be felt for generations, reflecting your values and making a difference in the world.
2. Supporting Charities Without Affecting Your Lifetime Finances
Many people are keen to support charitable causes but may feel constrained by their financial commitments during their lifetime. Gifting to charity in your will allows you to make a significant contribution without affecting your financial stability while you are alive. This option provides peace of mind, knowing that your current lifestyle and obligations are not compromised, yet you can still make a meaningful impact in the future.
This approach is particularly beneficial for those who might have substantial assets, such as property or investments, but need these resources for their own or their family’s needs during their lifetime. A charitable gift in your will ensures that once your dependents are provided for, any remaining assets can benefit the causes you care about.
3. Tax Benefits
Gifting to charity in your will can offer significant tax benefits, particularly in relation to inheritance tax. Inheritance tax is charged at 40% on estates over the tax-free threshold, which is currently £325,000 (as of 2024). However, if you leave at least 10% of your net estate to charity, the rate of inheritance tax on the remainder of your estate can be reduced to 36%.
This reduction can lead to substantial savings for your estate, potentially allowing you to give more to both your loved ones and your chosen charities. By carefully planning your will, you can ensure that you maximise the value of your estate while also benefiting a cause that is important to you. Many people find comfort in knowing that their wealth will go towards a good cause rather than being significantly diminished by taxes.
4. Flexible Giving Options
One of the advantages of gifting to charity in your will is the flexibility it offers. There are several types of charitable gifts you can include in your will, each with its own benefits and implications. These include:
- Pecuniary Gifts: A fixed sum of money donated to a charity of your choice.
- Residuary Gifts: A percentage of your estate after other gifts and debts have been settled.
- Specific Gifts: Particular items of value, such as property, stocks, or personal belongings, given to a charity.
This flexibility means you can tailor your giving to suit your personal circumstances and the needs of your beneficiaries. You can opt for a specific amount if you wish to ensure a certain level of support, or a residuary gift if you want to donate a portion of what remains after all other commitments have been fulfilled. This personalised approach allows you to support a range of causes and organisations in a way that best reflects your values and wishes.
5. Influencing Future Generations
Gifting to charity in your will can also set a powerful example for future generations. It can encourage your family and friends to consider their own charitable giving, fostering a culture of philanthropy and generosity. This is particularly significant in an age where social responsibility is increasingly valued, and individuals are looking for ways to contribute positively to society.
By making charitable giving a part of your legacy, you inspire others to think about how they can make a difference. It can serve as a meaningful conversation starter about the importance of giving back and can influence the values of those around you, encouraging them to follow in your footsteps.
6. Supporting Lesser-Known Causes
While large, well-known charities receive substantial support, many smaller or lesser-known organisations rely heavily on bequests to continue their vital work. Including a gift to a smaller charity in your will can have a profound impact, providing them with resources that might not otherwise be available.
These smaller charities often operate on limited budgets and serve niche communities or specific needs that larger organisations may overlook. By choosing to support them in your will, you can help ensure that diverse causes receive the attention and funding they deserve, making a meaningful contribution to areas that might be underfunded or neglected.
7. Personal Satisfaction and Peace of Mind
Knowing that you have made provisions to support the causes you care about can bring a great sense of personal satisfaction and peace of mind. Many people find comfort in knowing that their final act will have a positive impact, helping to create a better future for others. This sense of fulfilment can be a powerful motivator, providing reassurance that your values and passions will be remembered and continued.
Furthermore, making a charitable bequest can be a deeply personal decision that reflects your life's work, interests, and beliefs. It can be a way to express gratitude for support you or a loved one received, or to champion a cause you have been passionate about throughout your life. This emotional connection can make the act of giving even more meaningful.
8. Simple and Easy Process
Adding a charitable gift to your will is a straightforward process. It can be done when you first create your will or added later through a codicil, a legal document that amends your existing will. Many charities in the UK also offer free will-writing services or schemes to encourage charitable bequests, making the process even easier for donors.
Legal services companies are well-versed in advising on charitable gifts and can help you navigate the options to ensure that your will accurately reflects your wishes. They can also provide guidance on how to structure your gift to maximise its impact and any potential tax benefits. This professional support ensures that your charitable giving is executed according to your intentions, providing peace of mind that your legacy will be honoured.
Thinking of gifting to charity? Here's 5 things for you to think about or do
- Identify the Causes You Care About:
- Reflect on the charitable causes that align with your values and determine which organisations you want to support.
- Consider Your Financial Situation:
- Review your assets and determine how much you can comfortably leave to charity without affecting your dependents.
- Explore Giving Options:
- Decide whether to leave a pecuniary, residuary, or specific gift, tailoring your approach to your preferences and estate planning needs.
- Seek Professional Advice:
- Consult a legal professional to ensure your charitable bequest is structured correctly to maximise both tax benefits and the impact of your gift.
- Communicate Your Wishes:
- Discuss your intentions with your family and executors to prevent misunderstandings and ensure your charitable gifts are honoured as part of your legacy.
What to Do Next
Should you wish to speak to someone, we're always on hand to expand or clarify anything you're unsure about. It's our purpose to make sure you're fully informed before making any decisions, and you don't even have to be a customer.
Click here to get in touch or call us using the number at the top of this page.
Our guarantee: we are part of the Best Foundation, a voluntarily regulated body for the Estate Planning industry. As a member of the foundation, we hold ourselves accountable to providing the best professional standards, and upholding ethical values for all our customers.
