Charitable legacies – how deeds of variation can help make a bequest

Posted by Alison Craggs on
Leaving a legacy in your Will can be a thoughtful way to support a charity that has been important to you, and many charities rely heavily on legacies left in Wills for their survival. But if a loved one dies without leaving a legacy to a charity in their Will, is it too late? 

Fortunately not. Deeds of variation can be used to vary the terms of a Will up to two years after a person's death. It may seem strange to change the terms of someone else's Will but it is often a useful tool for beneficiaries who don't necessarily need their inheritance to redistribute the estate. So long as a beneficiary agrees, a deed of variation can be used to vary their inheritance in any way, including to leave a legacy to charity.

As well as being a great way to support a charity important to you or your loved ones, leaving a legacy to charity can have potential tax benefits. Charitable gifts are deducted from the value of an estate before inheritance tax is calculated. Inheritance tax is generally charged at 40% on the value of the estate exceeding the £325,000 nil rate band. So for example an estate worth £330,000 which leaves £5,000 to charity would fall within the nil rate band and not pay any inheritance tax. Additionally, an estate pays a reduced rate of 36% inheritance tax if you leave 10% or more of the 'net value' of your estate to charity.

Even if a charity has been remembered in a Will, a deed of variation can be used to correct an unclear legacy or one that might otherwise fail. For example, if the legacy has been left to a charity which no longer exists or cannot be identified, a deed of variation leaving the legacy to a similar charity could be a good way to honour your loved one's wishes.

Need help choosing a charity? Read our recent blog on how to pick a charity.

For further information or to make or vary 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 11-17 September 2017.

About the Author

Photograph of Alison Craggs

Alison advises clients on the best structure for their Wills and prepares powers of attorney and administers estates. 

Alison Craggs
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01865 254209

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