The tragic death of businessman Richard Cousins and his family in a seaplane crash on New Year’s Eve in 2017 re‑iterated the importance of including a “Disaster Scenario Clause” in your Will. A Disaster Scenario Clause allows you to state where you would like your estate to go if all your immediate family die at the same time as you. In the case of Richard Cousins, he named Oxfam to be his ultimate beneficiary, and they benefitted from his £41 million estate.
What happens if I don’t include a Disaster Scenario Clause?
Whilst grim to contemplate, failing to include such a Clause in your Will may result in your estate being carved up according to the intestacy rules, potentially resulting in your estate passing to the Crown. While some may be happy with their estate ultimately ending with the Crown, many would agree that they would rather be in control of the final destination of their estate, and that they can think of a relative or charity that they would rather it benefitted.
Consider making a Charity your Longstop Beneficiary
Choosing a charity to benefit from your estate, whether as your longstop beneficiary or just by leaving a gift in your Will, is a highly worthwhile action, and carries many benefits:
- Your gift will ensure that a charity close to your heart will continue its mission: Charities depend on legacies generously provided in Wills to continue their work. For example, the funding for over one third of Cancer Research UK’s lifesaving research comes from gifts in Wills*. And two out of every three guide dogs are funded by gifts in Wills**.
- Gifts in Wills allow a charity to carry out their bigger projects: While regular donations to a charity through your lifetime are invaluable to keeping the charity carrying out its day to day operations, there is no doubt that a legacy in a Will, especially a larger legacy, enables a charity to invest and grow, ensuring its long term survival.
- Reduce your Inheritance Tax Liability: All gifts left to a charity in your Will are exempt from inheritance tax. If your estate is taxable and you leave at least 10% of your net estate to charity, then your beneficiaries can benefit from a reduced rate of inheritance tax – 36% instead of 40%.
- Nothing is set in stone: You can leave as much as you can afford at the time of making your Will, and then always change your Will at any point in the future. You can even leave a non-binding note, say to family members, that if they decide that they do not need their inheritance from your estate, that if they wish to do so they could gift it on to a charity or enter into a Deed of Variation to re-direct the gift.
Giving to Charity in your Will:
- As a campaign supporter of the Remember a Charity organisation we pledge that when we meet with clients we will raise the question “Would you like to consider a charity in your Will?” Research has shown that by solicitors mentioning legacy giving as part of the Will writing process it can have significant impact on the levels of people actually giving.
- There are various ways of including a charity in your Will; from a legacy of a set amount or percentage of the residue of your estate. It could also be that once you have made provision for your immediate family, for example, your spouse and children you then consider a charity as the longstop beneficiary.
- It is incredibly helpful if you can provide your solicitor with the full name and registered charity number of your chosen charity as we need to ensure that the correct charity is referred to in your Will. You can search on the “Find A Charity”link on the Charity Commission’s website to ensure you have all the correct details.
- When a person dies the charity will be notified that they have been left a legacy. They often write back in appreciation. It can be helpful to leave a note with your Will explaining why you have benefited the particular charity so that this information can be passed on after your death.
For further information or to make an appointment to make or change a Will, please contact Alison Craggs or another member of the Blake Morgan Succession and Tax team.
Blake Morgan is supporting Remember A Charity Week, which runs from 10-14 September 2018.
Enjoy That? You Might Like These: