How financial planners and solicitors can help clients leave a charitable legacy

You may have noticed an increasing number of clients choosing to leave a portion of their estate to charity.

Today’s Wills and Probate reports that 50% of millionaires have already included a donation in their will, rising to 75% for those with estates worth over £5 million.

But charitable giving isn’t just for the wealthy. Further reporting from Today’s Wills and Probate found that the number of estates leaving legacies rose by 22% year on year in 2024, contributing to a legacy market now valued at £4.5 billion.

The report also found that the average estate size for those leaving a charitable gift was £599,000, considerably below the threshold of high net worth individuals.

If you have clients who want to leave a donation in their will, it may require careful planning to ensure it is best structured to support both the client’s chosen cause and their beneficiaries.

Read on to learn about how financial planners and solicitors can help clients leave a charitable legacy.

Leaving a charitable legacy has several advantages

There are several reasons your clients may want to leave a portion of their estate to charity. Their primary motivation is likely that they want to use their wealth to support causes close to their heart.

Many charities heavily rely on donations left in wills. Indeed, the latter report from Today’s Wills and Probate found that legacy gifts now make up an average of 30% of fundraised income across the top 1,000 legacy-supported charities – with some charities depending on as much as 50%.

Aside from their generous or altruistic motivation, clients may also be drawn to charitable donations as they are generally tax-free. This means the client can be assured that more of their wealth goes directly to the causes they support rather than being lost to taxes.

Moreover, if they donate 10% or more of the net value of their estate to charity, the Inheritance Tax (IHT) rate on the rest of the estate reduces from 40% to 36%.

Thus, their donation can support important causes while benefiting their beneficiaries through a reduced IHT rate.

Solicitors are key in structuring a charitable legacy effectively

Solicitors play a key role in helping clients leave a meaningful charitable legacy.

For instance, as a solicitor, you may be required to draft or update your clients’ wills to include charitable gifts, while ensuring that their wishes are legally sound and structured efficiently.

Your clients may also want to use a trust or charitable foundation to further improve the efficiency of their donation and make sure their donated assets are used exactly as intended.

Moreover, you may be called upon to help mediate or navigate potential disputes or complex family arrangements. This could include managing family disagreements or coordinating multiple beneficiaries to make sure the legacy is protected and fulfilled as the client intended.

Financial planners can help maximise the efficiency of the donation and the wider estate

Financial planners can help clients make their charitable donations as tax-efficient as possible, benefiting both their chosen cause and their beneficiaries.

We can help clients ensure they make full use of the tax reliefs available to them and their charitable gifts, both in life and after they’ve died.

We can also identify the most suitable assets to use as donations. For instance, it may be less efficient for clients to leave a property to a charity and other assets to their beneficiaries, as it could mean they miss out on the residence nil-rate band. So, choosing how to divide an estate can be key for mitigating taxes. That’s where we can help.

Furthermore, financial planners can assist clients in integrating charitable giving into their wider estate plan. This can help ensure their donations are sustainable and aligned with their wider goals, which might include their retirement plans and their ongoing support for beneficiaries.

Financial planners and solicitors can work together to support clients in leaving a charitable legacy

Through collaboration, solicitors and financial planners can ensure our mutual clients’ charitable legacies and intentions are realised.

By sharing information and maintaining consistent documentation, we can help clients and their beneficiaries avoid gaps or contradictions that might undermine their wishes. This could include any changes to the client’s financial arrangements, such as new investments or property sales, as well as changes to their intentions based on life events or updated preferences.

Solicitors and financial planners can also encourage clients to maintain clear records and open communication with their family and chosen charities to ensure the best outcomes.

Our sectors can refer clients to one another to help ensure their wills and estate plans remain up to date, efficient, and aligned with their wishes.

Get in touch

To find out more about how we can work together for the benefit of our mutual clients, get in touch.
Email info@fbwealth.co.uk or call us on 0333 1122211.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, or will writing.