Charitable donations

In the UK, around 15 per cent of the money charities receive comes from donations left in people's wills. Although family and friends are the more common beneficiaries, many want to continue to support the causes they believe in after their deaths.

Microsoft founder and dedicated philanthropist Bill Gates has famously pledged to leave his colossal $58bn fortune not to his children but to his charitable foundation. Gates isn't the only high-profile figure putting their money where their mouth is when it comes to spreading the wealth. Co-creator of The Simpsons and lifelong animal lover Sam Simon left $100m to PETA, Save the Children, and his own charity - The Sam Simon Foundation. Asked why, he explained that giving was a form of therapy for him and said simply, 'Everyone in my family is taken care of. And I enjoy this.'

Although your estate is likely to have a more modest value, perhaps you too are considering making a sizeable charitable donation in your will. Currently, three-quarters of people in the UK support a charity in their lifetime, yet only 7 per cent leave a charitable gift in their will.

But, as well as the feel-good factor, there are tax benefits to leaving money to charity. Whether you choose the local donkey sanctuary, the RSPCA, or Water Aid, money left to charity doesn't count towards your estate's value and can therefore reduce or even completely negate inheritance tax. If your full estate is worth over the inheritance tax threshold of £325,000, the rate of tax is a not insignificant 40 per cent. However, by leaving 10 per cent or more of your estate to charity, the rate can be reduced to 36 per cent.

Whether or not you decide to make a charitable donation in your will, Saga Legal advises that it's essential that you do what feels right and that you name a trusted, capable person to act as executor. Taking good legal advice is also important, as can be seen from the case of Mrs Watson, who died in 2010, some 19 years after making her will. Although she had bequeathed a relatively small sum to animal charities, as time passed and her estate was diminished by care costs, the sum became a far more significant proportion of the estate, leaving Mrs Watson's children facing a painful legal battle to claw back the cash from the charities.

Preparing for a time after your death can be an unsettling task, although many people find renewed peace of mind after putting their affairs in good order. The most important aspect of making your will is to do proper research and know exactly what legal implications there may be for you, your loved ones, and any charitable organisations you wish to support.

Chris Gibson has a BA in journalism and communication studies. He is always looking for new forms of communication in digital media. In his spare time he enjoys developing research about legal services on the market.

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