The value of gifts left to charities in wills is set to double over the next two decades.
According to analysts at Legacy Foresight, the predicted increase is due to increasing numbers of baby boomers passing away over the next few decades.
The research was carried out on behalf of the Australian Include a Charity campaign, which is part of Fundraising Institute Australia.
As reported in the Sydney Morning Herald, the research found that a greater proportion of those dying will have no children to pass on their estate to:
“Those in their 50s and 60s are wealthier than their parents and are more likely to have fewer children, or no children, as beneficiaries of their estates.”
Childless couples are four times more likely to leave a charitable gift in their wills, according to the research.
As a result, by 2040 the total amount left to charity will be more than double what it is today. This is after inflation is taken into account.
Size doesn\’t matter
Helen Merrick, campaign director for Include A Charity, said charitable gifts of all sizes were welcome:
\”It\’s not just wealthy people who give, with the average gift being left in their will of about $53,000, and many are smaller. Charities are grateful for gifts, big and small, it all helps,\” she said.
In the UK, charities receive more than £3bn a year in income from legacies – an all-time high.
According to a report by Smee & Ford, a provider of legacy information, this is up 10 per cent on the £2.8bn given last year.
Leaving money to charity in your will can benefit your estate as well as a good cause.
If you leave 10 per cent or more of your estate to charity, your inheritance tax liability is reduced from 40% to 36%.
The value of the gift doesn’t have to be worth 10% of your entire estate. Rather, it’s 10% of the net amount on which inheritance tax is due – a smaller amount.
You must first deduct your inheritance tax-free allowance, known as the Nil Rate Band and also the Residence Nil Rate Band if you’re passing on a property.
Here’s what the Gov.uk website has to say about giving to charity in your will:
“Your will says what will happen to your money, property and possessions after you die.
Your donation will either:
- be taken off the value of your estate before Inheritance Tax is calculated
- reduce your Inheritance Tax rate, if 10% or more of your estate is left to charity
You can donate:
- a fixed amount
- an item
- what’s left after other gifts have been given out”
For further information on including a charitable legacy in your will, contact Maplebrook Wills today.