When writing a will, one of the first questions you might ask yourself is: ‘who should I leave a gift to?’Guides
Whether you want to leave your home, some money or a cherished family heirloom as gifts, this ‘gifts in wills’ guide will explain how to leave a gift in your will, who can receive a gift and how your loved ones can make the most of your legacy when you pass away.
As is the complexity of estate planning, there are various types of gifts that you can leave behind in your will. These are:
A pecuniary gift, also referred to as a ‘pecuniary legacy’, is a fixed sum of money left to a specific individual or group of people in a will. The gift can either be given to the recipient directly (known as an ‘outright gift’) or placed in a trust, which the person can access at a later date.
For example, leaving money to charity would be classed as a pecuniary gift, as would giving money to children by placing it into a trust for them to receive on their 18th birthday.
As implied by its title, specific gifts in a will are made up of one or more dedicated assets that are handed over in a will. Specific gifts commonly include treasured family heirlooms like jewellery, artwork and furniture.
If the deceased no longer owns the item in question after death, it is said to be ‘adeemed’ -meaning that the gift has been revoked - and the beneficiary cannot claim an alternative inheritance.
Non-specific gifts can also be given when the will does not specify exactly what the gift is. For example, it may read: ‘I leave all of my personal possessions to my brother’.
A gift of residue, or residuary estate, is a term applied during probate when somebody is gifted whatever remains of the estate after the distribution of assets and payment of any related debts, taxes and fees.
In some cases, a residuary estate may be the only gift left in a will and the recipient will simply gain control of the entire estate.
In the UK, people are able to leave gifts in their will to just about anybody they like – these gifts usually go to a spouse/civil partner, children or other close family and friends.
Gifts can also be left to charity, often when the testator (the person who has made the will) has a close affiliation with a particular organisation or does not have any close family or friends.
The most common recipients of gifts in wills are children, who in some cases are not automatically entitled to a share of their parent’s estate when they die without a will – the first £270,000 will go exclusively to the surviving spouse, along with all personal possessions and half of whatever remains of the estate.
When writing a will, you can state clearly what you would like your child (or children) to inherit from your estate, while you can also decide to put their gift into a trust. A trust is an option usually taken up by parents wanting to make sure that their money is put to good use, such as paying for higher education, a first car or the deposit for a mortgage.
Children under the age of 18 cannot receive an outright gift and anything handed down to them should be written into a trust – this not only reduces the taxable allowance on your estate, but it also ensures that the child receives the gift when you feel they will be old enough to manage it responsibly.
Placing gifts into a trust is just one way in which your loved ones can avoid a hefty Inheritance Tax (IHT) bill on your estate when you die. To find out what else you can do to maximise your family’s inheritance and minimise the death tax, read our guide to Inheritance Tax planning.
As mentioned earlier in this guide, many people choose to use their wealth to donate to a charitable cause when they die. Leaving money to a charity in your will is another frequently used method to cut Inheritance Tax, and any donations made will be tax-free. Not only that, but leaving at least 10% of the value of your estate to charity reduces the Inheritance Tax rate charged on whatever is left by 4%.
To reference a charity in your will, it is important that you know its recognised name, as well as the address and registered charity number.
There are thousands of UK charities available to leave your money to, but donations do not have to be just monetary. Leaving your house to charity is also possible and works in a similar way to leaving property to children, a friend or anybody else. If you have any specific requests regarding how the gift is utilised, you must write these in your will.
You may think that what you write in your will is final – and often that is the case – but there are some scenarios in which gifts in wills do not reach their intended recipients.
Some examples of this include:
If you would like to leave a legacy and spread your wealth when you die, the only way to ensure this happens as you wish is to make a will (ensuring that it is updated as and when any minor or major life events occur).
Writing a will, however, can be a notoriously complicated process, and without the assistance of a legal expert, has the potential to go horribly wrong for everyone involved.
Once your will has been approved by our team, you will be sent a physical copy to sign and witness. After you've returned this version, our team will have a final review to confirm that everything is in place. We can then securely store your will, so that when the time comes, your executor knows exactly where to look for it.
Click below to start writing your own will today, or if you have any problems or need more information, contact us directly.