Will you leave your legacy to help a charity to do something rewarding?

I guess only people like Richard Branson can afford to leave 10% of their wealth to charity.

And under new rules that effectively came into force on April 6^th 2012, anyone who decides to leave 10% of their estate to charity will now pay 10% less Inheritance Tax — so this means 36% instead of 40% — on the remainder of their money. This is why it makes writing a will sense for everyone to do.

And with 66% of people (2 in 3) without a will, many of the half a million UK residents dying every year are in danger of leaving their spouses, partners and children inadequately looked after.

In some cases, with no planning, a relative or loved one can die and their money will end up as an unnecessary windfall for the UK taxman.

November is Will Aid month, and some 1,400 solicitors nationwide are waiving their fee for writing a will in return for a donation to charity. Suggested donations are £85.00 for a single will, £120.00 for a pair of basic mirror wills — typically near-identical wills for a husband and wife — and £40.00 for a codicil amending or adding to an existing will.

You’d normally pay on average around £120.00 for a single will and £200.00 for a pair of mirror wills.

Although it may seem unpleasant, writing a will simply sets out who gets what of your assets — and lets you arrange your estate (as your belongings become known on death) in the most tax-efficient way. Everybody has an Inheritance Tax ‘nil rate’ limit of £325,000. Leave less than this and your family or beneficiaries will not have to pay any tax on your legacy, but if your estate is worth more than the threshold, then they will have to pay 40% on anything above this unless you give 10% to charity.

Critically, the charitable donation is deducted before the tax is calculated, reducing the overall amount on which to pay tax even further. 

However, this £325,000 limit can be transferred between spouses. So any part of a spouse’s exemption up to £325,000 can be transferred on the second death, provided the taxman is informed within 24 months and the death occurred on or after October 9, 2007 — giving an exemption of up to £650,000.

If you don’t make a will, your estate is governed by strict intestacy laws. Contrary to popular belief that your spouse or civil partner gets everything, they will receive only the first £250,000, plus your personal belongings.

The rest will be divided into 2 with the children, grandchildren or great-grandchildren getting half — and the other half being held in trust. Here, the income from the trust goes to the surviving spouse or civil partner and the capital goes to the children, grandchildren or great grandchildren upon death.

If there are no children, grandchildren or great grandchildren, then the first £450,000 of the estate — plus personal possessions — goes to the spouse or civil partner and the remainder to either the deceased’s parents or, if they are dead, siblings or nieces and nephews. If you are not married, your partner will get nothing.

Mistakes and illegible writing can cause problems upon will execution — and use a solicitor to make sure the will is drawn up properly. So ideally avoid DIY will-writing kits.

To find a Will Writer taking part in Will Aid week, then telephone : 0300 0300 013 or visit www.willaid.org.uk

Remember A Charity Week, is the annual awareness campaign designed to encourage everyone to include good causes in their will.

Charity shops also use the week to remind shoppers about the financial benefits of legacies. They do not attract tax and are paid before an estate is valued for Inheritance Tax purposes.

Remember A Charity was formed 12 years ago in 2000 and now has more than 150 charities on board. Legacy income is worth almost £2billion a year to these organisations, but as we speak currently less than 10% of estates leave legacies.

You can get more information about leaving legacies in a will by visiting www.rememberacharity.org.uk  or by calling Tel No:  0207 840 1030