Canadian banker Keith Owens loved the town of Sidmouth. He visited his mother there for years and planned to retire to the seaside town at the end of his successful career.
However, in 2007, at the age of just 69, Keith was diagnosed with terminal cancer and doctors told him that he had just a few weeks to live. He died in December of that year.
The banker, who was born in nearby Totnes, had initially set aside his retirement fund with the intention of spending it based in Sidmouth. However, his premature death led him to revise his plans and leave an extraordinary legacy, the BBC reports.
Before his passing, Keith contacted the Sid Vale Association (SVA) and told them he wished for his retirement fund to be used to “support local projects, which made use of voluntary labour, and in particular to sustain the ambience and way of life, recognised in Sidmouth and its surroundings”.
Keith left a staggering £2.3 million to the town, with one of his dying wishes that 1 million flowers were planted in Sidmouth. “At the end of his days he decided in his will that his money should be made available for the benefit of the community,” the SVA said.
Leaving a legacy to causes close to your heart might also be an important part of your own estate plan. So, with Small Charity Week taking place from 24 to 28 June, read on to learn more about the benefits of charitable giving in your will.
1. Support causes that you care about
Keith Owens’ story is just one example of an individual leaving a bequest to support a beloved cause.
As you might expect, legacies are a crucial source of income. The organisation Remember a Charity reports that charity legacy income is estimated to have reached £4 billion in 2022/23 with donations left in a will representing around a third of all charity income.
As an example, Civil Society reports that, in the financial year ending March 2023, legacies were the largest single source of income for Cancer Research UK, representing £261 million of the charity’s income.
Leaving a gift in your will is a common way to donate funds to a charity or community cause you care about. This can be in the form of:
- A specific cash amount
- A percentage of the total value of your estate
- Assets such as land, property, or shares.
Small Charity Week is aimed at increasing the profile of smaller causes doing superb work, so considering leaving a bequest to a smaller or local cause can be a great way to leave a lasting impact.
2. Reduce your tax liability
Alongside all the altruistic reasons to leave a legacy in your will come the personal tax benefits.
If you’re concerned about the potential Inheritance Tax (IHT) bill your loved ones may face when you pass away, charitable giving can be one proactive way of reducing your liability.
The IHT rules support and encourage legacy gifting in two key ways:
- Gifts you make to registered charities do not form part of your estate for IHT purposes
- If you donate at least 10% of your estate to charity, any IHT that is due is charged at 36% rather than the standard rate of 40%.
So, if you decide to leave a portion of your wealth to charity in your will, you could reduce your family’s IHT liability and support an important cause.
3. Leave a lasting impact
When you sit down with a professional to build a financial plan, your aims and ambitions will be front and centre. Your wealth and financial arrangements are simply a means to an end and are there to support your life goals, which may include:
- Retiring on your own terms
- Achieving your desired lifestyle in the future
- Supporting your family
- Ensuring you can pay for later-life care
- Protecting your income and loved ones in case the unexpected happens.
Many people would also include “leaving a legacy” as an important aspect of their financial plan. This may be to family or, following in the footsteps of Keith Owens, to a local or national cause that is meaningful to you.
Many of our clients create a financial plan with the aim of “doing some good” after they have passed away. That might be helping a grandchild through university, or ensuring you can support medical research, your local village hall, or an animal rescue or conservation charity.
We can help you to build a financial plan that ensures you have “enough” to live the lifestyle you want, while also incorporating a level of legacy giving that you feel comfortable with.
Whether you want to thank a charity that has supported you, or you want your local community to plant 1 million flowers in your town, get in touch to find out how we can help.
Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.
