Generally speaking, there are two ways to leave money to charity in your will.
The first option is to very simply, specify any charities you wish to benefit from your will. Alternatively, you can leave money or property in a trust and leave it up to your trustees to decide.
Where you choose to name a specific charity, it is always best to include the charity number. Many charities have quite similar names, or the name of the charity may change, and you want to be sure your gift goes to where it was intended.
If you choose to let the trustees decide where your money goes, you may wish to leave instructions to help guide them.
You have several options for what to leave a charity in your will, and you may wish to consider what might benefit them the most. Your gift may be:
● A cash amount
● A specific property or asset
● Your residuary estate or a share in your residuary estate (your residuary estate is what is left after other specified gifts, costs, and tax).
Under the Inheritance Act, you must make reasonable provision in your will for any dependants that you have. If your will fails to provide, a family member can contest any charitable gift in order to obtain the financial provision they are entitled to under the law.
Alternatively, it is possible for a family member to contest the will on the grounds that you were under undue influence or not of sound mind when you made the gift.
Any gift left to a UK charity is free of inheritance tax liability. However, if you wish to make a gift to a charity outside the UK, the situation is more complex. Not only are charitable gifts tax-free but leaving gifts to charity in your will could mitigate your tax liability overall. When you leave at least 10% of your estate to charity, the inheritance tax liability of the rest of your estate falls to 36%.