When preparing Wills, one of the most difficult points for clients (particularly those with young children) to think about is a disaster provision. Sometimes (and with misplaced cheeriness) known as a Disneyland Clause, these ask a client to consider who they would wish to inherit their estates if, at the date of their death, their children have either died before them or at the same time, without leaving surviving grandchildren.
For most people thinking about their Wills this is not a scenario that would ordinarily come to mind. Fortunately, this is not something that happens very often, but as the news tragic news on Father’s Day of a man being killed with his 2 young children and dog by a drunk driver showed, it is possible.
If there are no family members who you would wish to benefit, either because they are wealthy in their own right or you are an only child, then this can be a very good chance to benefit worthy causes. As a will drafter, I like to include gifts to charities as these rarely fail (and so eliminate the risk of an intestacy). It also means that you know, should the unthinkable happen, your estate will still benefit those in need or be used for a cause close to your heart.
This is not to say that gifts to charities should only be included as a last resort, however it can be quite an elegant solution to what is otherwise a horrible scenario to consider.
If your estate is likely to be subject to inheritance tax, a gift to charity can be a good way of reducing the inheritance tax liability or having inheritance tax incurred at a lower rate. As an incentive to leave gifts to charity, any amount left to a charity would be exempt from inheritance tax. If you leave at least 10% of your net estate to charity then any inheritance tax that would be payable, will be charged at a rate of 36%, rather than 40%.
There are therefore a few excellent reasons to consider leaving a gift to charity in your Wills.
Drafting gifts to charity, particularly if you wish to achieve the reduced IHT rate, can be complex and we would therefore advise you to speak to a STEP qualified solicitor to ensure that your Wills accurately reflect your wishes.
At Allan Janes, we pride ourselves on the fact that all solicitors within our Wealth Management Team are members of STEP (Society for Trust and Estate Practitioners) and therefore specialists in their field. Please contact either Alex Stanier or Ashley Minott to discuss preparing your Will or any gifts that you would wish to make to charities.