Leaving a legacy using a Charitable Trust
Thursday 3rd March 2022
Katy Baxter
Nearly all charities in England and Wales have experienced some negative impact from Covid-19, reports the 2021 Government Charity Commission Covid-19 survey. According to the figures, 85% of charities have had their services, and delivery of services, impacted, and 72% are dealing with a change in their financial position. This could mean that they have had to draw on their valuable reserves, or reduce the services they can provide.
Restrictions to 'in-person' fund raising events have had an impact on fundraising levels, as we would of course expect, and 62% of charities consequently anticipate a threat to their charity's financial viability in the next 12 months.
All of this obviously makes it extremely difficult for charities to be able to make long-term plans, because of the uncertainty regarding on going restrictions and funding.
These are clearly very worrying statistics, and perhaps particularly worrying on a local level when we realise that it is the smaller charities, providing locally focussed support in our communities, that are most at risk.
So, how can you and I help? The obvious way is to be aware, and financially supportive. Having worked in financial services for more than 30 years, particularly providing estate planning advice to retirees, I am constantly humbled by the way that so many of my clients go out of their way to leave meaningful legacies to charities close to their own hearts. Some take it upon themselves to be part of fundraising endeavours, and others are helping financially on a regular basis, and even including bequests in their Wills.
Legacy planning is a subject that many charities are now looking to focus on. Some are supported by local Will writing businesses for their 'Write a Will' month, for example. This is where you can have your Will drawn up for a minimal cost, and the charge is donated by the Will writer to the charity involved. Not many charities, however, are talking to their potential supporters about the benefits of Charitable Trusts.
Charitable Trusts have a significant number of benefits for both the donor, and the charity. For Charities some of the potential benefits are:-
• Adding significant value to donors for their own tax planning and philanthropic giving
• Resources available to help administer the Trust assets
• On-going donor and family commitment to supporting charities close to their hearts
• Gifting from donor beyond their death
Some of the advantages for donors are:-
• Gift Aid and income tax relief on cash gifts into the Trust
• Capital Gains Tax relief on switching shares/unit trusts etc into Charitable Trust
• Including loved ones on the philanthropic journey
• Reduction in Inheritance Tax on estate if leaving 10% of net estate to Charity/Trust
• Can potentially hold 'passion' assets in the Trust e.g. works of art, classic cars
• Leaving a Charitable Legacy, something worthwhile to be remembered by
• Don't have to change Will every time donor wants to amend death time charitable giving instruction
If you would like to find our more about giving via Charitable Trusts, or leaving a bequest in a Will, please do get in touch.