With Christmas just around the corner, many of us will have been thinking about gifts. Whether it is something special for our loved ones or a charitable donation, giving gifts is a wonderful way to bring joy to ourselves and others. However, as we grow older, we often start to consider a different kind of gift. Leaving something special in your will, whether for loved ones or a charity, is a wonderful way to create a lasting legacy, and can also offer significant tax benefits.
Who can you leave a gift to in your will?
When it comes to leaving gifts in your will – you can do this for whomever you choose, be it family, friends, or charities. Perhaps you would like to leave your family home to your children, establish a trust for your grandchildren, or support a cause close to your heart. Whatever you wish to do, you should always seek the advice of an expert estate planner to ensure your gift reaches the intended recipient as tax efficiently as possible.
What types of gifts can you leave in your will?
There are many different types of gifts you can leave in your will. These include a residuary gift, which is a percentage of your estate; a pecuniary gift, which is a fixed sum of money; or a specific gift, which covers any particular items you own. You may also choose to set up a trust with detailed instructions, or donate to a charity’s endowment fund, ensuring your legacy supports a cause important to you.
What are the benefits of leaving gifts in your will?
Leaving a gift in your will is a great way to create a lasting legacy, support loved ones, and reduce inheritance tax. Many charities rely on gifts in wills to continue doing their amazing, life-changing work. For example, Macmillan Cancer Support fund around 40% of their vital services through gifts in wills alone. However, it is not just charities that benefit from these gifts. Leaving 10% or more of your estate to charity can reduce your overall inheritance tax liability by reducing the rate of tax from 40% to 36%.
Gifts are also a great way to ensure your estate is distributed in line with your wishes. Proper estate planning will ensure your beneficiaries get the maximum benefit from your estate, giving you the peace of mind of knowing your loved ones are taken care of. However, to further reduce inheritance tax, it is worth considering all options available. As well as leaving gifts in your will, there are many ways to gift assets to your loved ones prior to your death.
At Scott Bailey, our Wills, Trusts and Probate team has extensive experience managing all aspects of estate planning. For advice on leaving a gift in your will, email [email protected] or phone us on 01590 676933.