Thursday 21 November 2019

Your Money: How to leave money to good causes

Including charities in your will could support valuable work after you pass on

Plan ahead: Making a will can help individuals support loved ones and charities. Picture posed
Plan ahead: Making a will can help individuals support loved ones and charities. Picture posed
Sinead Ryan

Sinead Ryan

The Irish Cancer Society is a charity which most of us would agree does good work.

Supporting those with the challenge of serious illness and the financial hardship cancer can cause costs a lot of money; some €20m or so, which is essentially funded by public donations.

The charity's annual 'Daffodil Day' and 'Movember' are probably its best-known fundraisers.

However, its latest annual report revealed that last year, one man had bequeathed his entire house and savings to the charity, some €715,000, while another two left a combined €700,000 in their wills.

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In 2017, the bequest of Elizabeth O'Kelly made the news. A massive €6m was left from a total of €30m donated entirely to charities.

Leaving money to good causes is something ordinary people can consider in November, which is My Legacy Month. Some 65 charities have pulled together to raise awareness of the importance of donations to fund charitable work. So this week, I'm looking at how to do just that and, at the same time, keep your generosity away from Revenue in favour of hard-working charities.

Bernadette Parte is a solicitor who deals with wills and legacies, and is encouraging people to think about bequests.

"Only 30pc of people make a will, and just 57pc of parents," she says.

They often feel they have nothing to leave, or it is a bit morbid thinking about it, and even the word 'legacy' has notions of trust funds and wealth. But it is really important even on a practical level, especially if you have children, to make a will and make your wishes known. If you die, for instance, your spouse will be entitled to two thirds of all you leave, with your children having just one third shared between them.

It can be far more helpful to direct everything to each other and thereafter to the children, but that needs a will.

Ms Parte says: "If you're co-habiting, you have no automatic right to anything, and your partner has to apply to the courts for a portion. With a will, you get to decide who and how much, and why."

A prominent case from last week revealed Dublin widow Patricia Martin had died intestate (without a will), and with no children, leaving her entire €77m fortune up in the air.

Leaving a legacy

The first advice, says Ms Parte, is to leave as much as you can, tax-free, to your loved ones (see panel below).

She adds: "Most of my clients want to pay as little as possible in tax. So leaving to charity means the entire amount can be gifted, because registered charities don't pay any tax."

Pick a known charity

Ensure the charity is known. It should have a charity number (CHY), which is a tax designation, and you can search on charitiesregulator.ie to make sure.

Be specific

Ms Parte notes: "It's helpful to direct your bequest specifically. For instance, is it intended for a particular branch of a charity? It should be named, rather than general, although you can add that it can be left to such-and-such a charity, 'or a similar charity'.

"However, it's best not to over-direct what the money should be used for.

"You should avoid saying you want the legacy used for 'research and development', as it might be that particular charity doesn't undertake any.

"A better option is to say it's 'unencumbered', or for the 'general purposes' of the charity's work."

Creating a will

Making a will costs around €50-€150 for a basic instruction. If you have a complicated estate, foreign assets or unusual family arrangements, it will be more. See mylegacy.ie.

Irish Independent

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