How to do a good deed that will outlive you

‘I don’t want to achieve immortality through my work; I want to achieve immortality through not dying,’ said Woody Allen.

That option isn’t open to any of us – but if you leave a charitable legacy in your will, you might achieve the next best thing.

When you write your will, your first thought will naturally be for your nearest and dearest. But wouldn’t it be good to make the last effective act of your life also one of the best? Leaving a gift to one or more charities of your choice is a chance to go out in a way you’d really want.

Charity 1, Taxman nil

If your estate is worth more than the inheritance tax nil-rate band (currently £325,000 per person) your beneficiaries will have to pay tax at 40 per cent on everything above this band. So if money will be lost to tax anyway, it makes a lot of sense to choose a charity to receive it instead – because the amount you give to charity won’t be taxed.

Even better, if you donate 10 per cent or more of your estate to charity, the inheritance tax on the rest will only be 36 per cent, instead of 40. And if your donation brings your estate down below the nil-rate band, your family will avoid inheritance tax altogether.

What are your options?

There are many ways to leave a gift to charity – some are very simple, others are more complex but come with certain advantages.

• A cash gift – leaving a set sum of money is easy, but it’s probably not the best choice, as you don’t know exactly what your estate will be worth when you die.
• A gift in trust- you can leave a gift in trust so that one beneficiary can have use of it for a period of time, before passing it on. For example, you could leave a property to be used as a Scout hut for a number of years, to be sold later to benefit your family – the best of both worlds.
• A conditional gift – you could state that the charity will receive your gift only if certain conditions are met – for instance, if your main beneficiaries die before you, you can specify that the charity will inherit.
• A share of your estate – instead of leaving a fixed sum, you can specify that a percentage of your estate will go to charity. Alternatively you could make a ‘residuary gift’, whereby everything not left to other people will go to the charity.
• Physical items – there may be actual objects such as antiques, valuables or works of art that you wish to leave to charity. Certain items (such as property) might have far more practical value to a particular charity than the monetary value alone.

Remember, whatever your wishes, you need to specify them in a legally binding will or they won’t happen. We always recommend speaking to a professional advisor who can help you draw up a will that expresses your wishes clearly.

Making your will guarantees peace of mind, and remembering a charity gives you a part to play in their future.

Nick Green, Communications Manager at unbiased.co.uk

Find out more about getting professional advice and finding a charity to leave a gift to.