Wills with charitable beneficiaries

Remember A Charity has produced a leaflet to assist professional advisors when drafting Wills which include gifts to charitable beneficiaries.

This leaflet has been kindly written by Lester Aldridge LLP, who are experienced practitioners in the creation and administration of both UK and international Wills.

To order free copies of this leaflet please contact us.

 

There are a number of different things to consider when writing a Will with a charitable beneficiary.

 

Is the organisation a charity?

Some voluntary organisations are not registered charities, because of their wish to campaign or because they are excepted or exempt charities.

However, campaigning organisations may well have formed Charitable Trusts in order to receive donations and legacies in support of the organisation, so you should check with them directly.

Certain organisations in England and Wales will not be listed on the Charity Commission Register, such as:

  • exempt Charities under Schedule 2 of the Charities Act 1993
  • charities excepted by order or regulation
  • organisations whose income does not exceed £5,000 per annum
  • registered places of worship

 

Verifying a charity’s name

Many clients are hard pressed to remember the exact names of charities they wish to benefit.

The costs to the estate may be significant if the identity of a beneficiary is not clear, so it is vital that you check the charity’s correct name when preparing a Will.

This can be done quickly and easily through the Charity Commission or GuideStar. It is important to also include the charity’s address and registration number. We would advise that you include the charity’s name, address and registered charity number on each occasion the charity is named in a Will.

 

Local branches of national charities

Your client may want to leave a gift to a local branch of a national charity. If this is the case, it is important to establish whether:

  • this is so that the funds are used locally (and if the charity is unable to use the funds locally that the gift should fail)
  • the gift should pass through the local branch, but is to be used as for any other legacy left to that charity (i.e. as unrestricted funds)
  • the local branch is a charity in its own right, as this will affect the charity details that are included in the Will
  • What if, at the date of your client’s death, the local branch no longer exists? You should ask your client whether he/she would want the legacy to fail or to be used by the charity for its general purposes

Please advise clients that the charities themselves are in the best position to judge where the greatest need is when the time comes.

If they really wish for their gift to be used in a stated area, they should do so by reference to a wish but without creating a binding obligation.

Specific projects

There are risks involved in leaving funds to charities for specific projects, as these projects may have been completed prior to the testator’s death. You may therefore suggest to your client that this is expressed as a wish, to ensure that the gift does not fail.

Foreign charities

Gifts to charities outside the UK in general are not exempt from Inheritance Tax, except gifts to organizations in the EU which would qualify for charitable status if they were in the UK. However, it may be possible to leave funds a UK charity with links to the foreign cause that your client wishes to benefit, thereby avoiding paying tax on the gift.

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