A legacy is a gift in a will. It may be a specific sum or
item or a share of what is left of a donor's estate after all the
other specific gifts have been made. It may be contained in
the will itself or in a codicil, which is a legally valid addition
to a will.
- For charities one of the main advantages of legacy income is
that it is mostly unrestricted income
- Gifts to charities are free of inheritance tax.
Inheritance tax is charged (at 40%) on the value of an estate over
and above the inheritance tax threshold (nil-rate band) - currently
£325,000 for individuals and £650,000 for married couples/civil
partnerships (frozen for 4 years until 2014/15)
- Whilst 75% of the population give in their lifetime only 7%
remember a charity in their will
- Despite this, legacy income is worth over £1.95 billion
The different kinds of legacies
The most straightforward type of legacy where a specified amount
is given e.g. £500 to Cancer Research Cymru. The main
drawback is that the value is eroded over time by inflation.
Where either all or a proportion of the residue of an estate are
given after all specific bequests have been made. These legacies
are on average considerably more valuable and keep up with
inflation better as the main item of any worth is likely to be
property. With the decline in the birth rate, and the
increase in life expectancy and property ownership there will be an
increase in the number of people with significant assets who do not
have family to bequeath their estate to - this is a real
opportunity for charities.
When a donor leaves a specific item which can be kept or sold by
the beneficiary e.g art.
Long stop legacy
These state that if all other provisions of the legacy fail, for
example if all the named residuary beneficiaries have died or there
are conditions attached which cannot be met, then the estate
reverts to a charity. In these cases it is unlikely that the
charity will receive anything but if it does it will be a
Reversionary or life interest
Where, for example, an elderly relative needs to be cared for, a
life interest clause is often used such as 'My house is given to
Valleys Kids with a life interest to my Uncle Charles'. This
is a useful way of carrying out responsibility to the supporter's
family whilst ensuring a valuable legacy to charity.
There are two other terms linked to legacies that you should be
An addition to a will containing supplementary instructions
drawn up and witnessed in the same way as a will. It is a
simple way in which people can add instructions to their will
without having the whole thing redrafted e.g. they could draw up a
codicil to add a £1,000 legacy to your charity.
Deed of variation
This is a way of changing a will after the person who made the
will has died and can only be done if all the beneficiaries of a
will agree e.g. if the deceased was a keen supporter of the
environment the family could instruct the executors to make a £500
bequest to an environmental charity. This has to be done
through a legally drawn up deed of variation. Any amount
given in this way is exempt from inheritance tax.
To find out about what motivates people to leave a legacy; how
to develop an appropriate case for support; the range of legacy
marketing techniques available to you; how to embed legacies in
your organisation; and how to evaluate your legacy fundraising
activity, come on Giving Wales Introduction to legacy