Advising the charity
If possible secure the client’s consent to inform the charity of the legacy. Charities appreciate the opportunity to express their gratitude.
Charity identity
Make sure that the intended charitable beneficiary is clearly identified. Check on the Charity Commission’s website (www.charity-commission.gov.uk) to ensure that it exists as stated and that the name is spelt correctly. Always include the charity registration number to aid identification. If the charity is unregistered, contact the charity’s treasurer to obtain the correct description. In case the charity restructures, and thus becomes a new legal entity between the making of the will and death, include a clause which will ensure that the gift is capable of passing to the new entity. Consider including a gift-over clause to allow another charity to benefit if the gift fails.
Chattels
To realise their maximum value, ensure that chattels are valued and auctioned by a reputable international auction house. Charities can often recommend firms who offer concessionary commission rates to charities.
Dependants
Warn the testator that if he/she has dependants but chooses to leave all their estate to charity, they should be aware that such dependants may be able to claim “reasonable financial provision” under the Inheritance (Provisions for Family and Dependants) Act 1975.
Estate Assets
Assess the client’s estate to ensure that the will accurately reflects what they intend.
Overseas Charities
When a gift is being left to an overseas charity, check if it has a UK affiliate to which the gift could be left instead, thus achieving inheritance tax exemption.
Property in Trust
To avoid costly confusion later, ensure that responsibilities for the property’s insurance and maintenance are clarified between the life tenant and the remaindermen and that sufficient funds have been allocated.
Receipts
Include a receipt clause in the will to allow the charity to give good receipt and discharge the executors from their duty to ensure that the right person has received the money.
Restricted Funds
If the money is left for a specific purpose, ensure the charity is prepared to accept the money for that purpose and that the legacy is enough to cover the purpose. Charities generally prefer the freedom to choose to use the funds wherever the need is greatest at the time.
Tax
To avoid confusion or possible costly litigation, where the estate is to be divided between exempt and non-exempt beneficiaries, it is advisable to be absolutely clear where the burden of Inheritance Tax is to fall. After death, to avoid incurring unnecessary Capital Gains Tax, it might be necessary to appropriate the relevant assets to the exempt residuary beneficiaries before sale. If the testator wishes the burden of IHT to be paid from residue, check the likelihood that there will still be sufficient funds left for the residuary beneficiaries. Otherwise, warn the testator of the likely outcome.
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