Different Types of Legacy
Types of Legacy
There are a number of types of Legacy which you can make to support the Friends:
A Pecuniary Legacy
This simple form of Legacy allows you to give a specific sum of money to the Friends. The disadvantage of this kind of gift is that the value will decrease with inflation unless your Will provides for indexation.
A Residuary Legacy
This is the gift of all or part of the net residue of your estate after all liabilities, taxes, legacies and administrative expenses have been met. This gift is particularly simple as you neither have to quantify the sum nor worry about inflation when you draw up your Will.
A Specific or Non-Money Legacy
If you wish, you can leave a personal possession, such as property, jewellery, works of art or stocks and shares to the Friends. (Please bear in mind that such a gift will only take effect if you still own the specified possession(s) when you die.)
A Conditional Legacy
This provides for the eventuality that, if anyone of your named beneficiaries does not survive you, their part of your estate will be left to the Friends.
A Diversionary Legacy
This gift has the advantage of providing for your family first and then benefiting the Friends. It involves leaving your assets to trustees so that the beneficiaries can enjoy the benefits during their lifetime with the whole or a portion passing to the Friends on their death.
Wording for a Will or Codicil
An appropriate form of words for a Pecuniary Legacy would be: “To the Friends of St Cross Hospital Winchester (Registered Charity No. 1143173) for its general charitable purposes, I give £_________ and I declare that the receipt of the Treasurer of the Friends of St Cross Hospital Winchester shall be full and sufficient discharge to my Executors for this Legacy.” An appropriate form of words for a Residuary Legacy would be: “I give _______% of my residuary estate to the Friends of St Cross Hospital Winchester (Registered Charity No. 1143173) for its general charitable purposes and I declare that the receipt of the Treasurer of the Friends of St Cross Hospital Winchester shall be a full and sufficient discharge to my Executors for this gift.”
Explanation of tax benefits
The Friends of St Cross Winchester is a registered Charity (no.1143173). This means that any gift you make to the Friends in your Will will be deducted from your estate before it is assessed for Inheritance Tax. The rate of inheritance tax is currently 40% and Executors need to pay this level of tax on assets above the threshold of £325,000 for an individual or £650,000 for married couples and civil partners (in 2020/21 tax year) subject to the tax history of each individual or couple.
Changes to Inheritance Tax in 2012
In April 2012, a reduced rate of Inheritance Tax of 36% was introduced, for estates leaving a Legacy to charity. If you leave 10 per cent or more of your estate to charity, then the government will take 10 per cent off your Inheritance Tax rate. No beneficiaries will be better off, just the charities
Deed of Variation