Feeling Generous? The Benefits of Leaving a Gift in Your Will

Making a Will is one of the most important steps you can take to ensure your wishes are honoured and your loved ones are cared for after you're gone. Whether you're just starting out in your working life, building a family, or enjoying retirement, leaving a gift in your Will allows you to leave a lasting legacy and support causes close to your heart. It's a simple yet profound way to make a difference, providing peace of mind that your values will live on through your generosity.

The Time to Start Considering Leaving a Gift in Your Will is Now 

There’s never a better time than the present to start thinking about life admin. It's particularly important to get your finances in order now, so you know what to expect in the future.  Life has a way of throwing up curve balls, no matter who you are, therefore having a decent handle on your own estate is prudent, but it can also give you a much-needed sense of stability and control.

Making a Will is essential for everyone, regardless of age or wealth. It provides clarity on how your assets should be distributed, preventing disputes and ensuring that your estate is handled according to your wishes. If you die without a valid Will, your estate will be distributed according to the rules of intestacy. This may not reflect your personal wishes, and loved ones may not inherit as you intended. By having a Will, you have the power to decide who benefits from your estate, including friends, family, and charitable causes.

However you go about making your Will, you may have overlooked the potential positive impact of leaving a gift in your will. 

The Positive Impact of Lifetime Gifting & Leaving a Gift in Your Will

Lifetime Gifting

Lifetime gifting relates to any gift you make while you are still alive, rather than gifts left in your Will.

If you were to gift over £3,000 to someone and then live for over seven years, there's no IHT liability on that, successfully reducing your estate and your IHT bill. If you pass away within seven years of the gift, there will be IHT to pay. It depends how much the gift was for and how long after it was gifted you die. So the longer the period from the date of the gift to your death, the less IHT there will be to pay.

Other than these larger types of gifts, you can also gift:

• Up to £3,000 every tax year, which is known as the annual exemption.
• Gifts of £250 per person to other people you have not already made gifts to. 
• Wedding gifts of up to £1,000 per person, £5,000 to a child, or £2,500 to a (great)grandchild.
• Gifts from income, such as for significant birthdays or celebrations Provided that, after making them, you are able maintain your normal standard of living. 
• Payments to help out with another person’s living costs, such as an elderly or minor relative. 
• Gifts to charities and political parties.

Leaving a Gift in Your Will

In terms of gifting outside of your immediate family, leaving a gift in your Will allows you to continue supporting the causes you care about even after you're gone. Whether it's a charity, an educational institution, or a community organisation, a charitable bequest can provide essential support and ensure that your values and passions continue to make a difference.

Charitable donations made through your Will can reduce the Inheritance Tax (IHT) on your estate. Currently, the standard IHT rate is 40%, but this can be reduced to 36% if you leave at least 10% of your net estate to charity. This not only benefits the charitable causes you choose to support but also maximises the value of your estate for other beneficiaries.

If you leave a gift in your Will to a charity, that will be exempt from IHT. In addition, if you were to leave 10% of your estate to charity, your IHT rate is reduced to 36% from 40%.  

Leaving a gift in your Will is a powerful way to bequeath a lasting legacy. It can be a testament to your values and the causes you believed in during your lifetime. Whether it's a small contribution or a significant endowment, your gift can have a lasting impact and inspire others to follow in your footsteps.

How to Leave a Gift in Your Will

Leaving a gift in your Will is a straightforward process, but it requires careful planning and legal guidance. Here are the key steps:

1. Decide on the Type Gift

You can choose to leave a specific sum of money, a percentage of your estate, or particular assets, such as property or shares. You may also consider a "residuary gift," which is a portion of your estate remaining after all other gifts and expenses have been paid. 

2. Choose the Beneficiaries

Clearly specify the charities or organisations you wish to support. It's advisable to include the charity's registered number to avoid any confusion.

3. Consult a Solicitor

A solicitor can help ensure that your Will is legally valid and that your intentions are clearly expressed. This is particularly important if you have complex wishes or a sizable estate.

4. Keep Your Will Updated

Circumstances change all the time in life, so it's important to review your Will regularly to ensure it still reflects your wishes. This is especially true if you've named a charity that may no longer exist or if new causes have become important to you.  

Contact Us to Talk Through Leaving a Gift in Your Will

Leaving a gift in your Will is a meaningful way to support the people and causes you care about. It provides a sense of purpose and can have significant benefits for both your estate and the beneficiaries. At Winston Solicitors, we understand the importance of careful estate planning and are here to guide you through the process, ensuring your legacy is honoured and your wishes are fulfilled. Contact us today to learn more about how we can help you make a difference for the future.

To speak to a private client solicitor about the importance of Wills and setting up an LPA, please contact our Wills and Probate team on 0113 320 5000, or email @email.