Bequests to charities - have we done the right thing?

CarolWHerts

In our latest wills we included a provision to leave 10% shared between four named large charities on the understanding that this would reduce the overall IHT rate. We're talking of an estate in the low seven figures (if our main plan of spending the lot doesn't work). However I've been disturbed recently by stories of charities included in this way rapaciously pursuing executors for their share. Whereas we've always been committed charity supporters, and really want to leave some money for charitable purposes (the kids are getting plenty), having recently been executor for my parents, the last thing I would have wanted at that time would be hassle from overenthusiastic charity lawyers. Am I overthinking this? Should I stop reading online horror stories or change this when we next review our wills (we're in our 60s so hopefully a long time to go and achieve those spending targets). 
Edited to clarify that my children are the executors. 

sammyjammy

I would suggest its better to leave them a fixed sum of money to negate the issues you've read about, I've read the same, its understandable that they will attempt to get the most they can in the quickest time but can cause difficulties for everyone else.  I guess the issue with a fixed sum is making sure its reasonable alongside your  other bequests.

If you changed it to £10k now and that was all you had left

Brackenfield

One of my parents distributes estates for a living.  They have said they will never leave money to charity because of the stress and hassle charities cause the executors.

I don't know if it would work but personally I'd put the percentage in my will and leave a separate letter for the children/executors detailing the charities so when probate or confirmation is granted it doesn't name the charities.

p00hsticks

I've been executor of a will that left sums to several mainstream charities and my personal experience is that the scare stories were unfounded - the charities contacted me politely once they picked up via the probate grant that they had been mentioned in the will, but once I acknowledged them and told them that the money would only be available once a property had been sold, they left me to it and didn't chase at all. 

I've also seen the advice mentioned by @sammyjammy to leave a fixed sum rather than a percentage, but the problem wit that is that if your estate is worth substantially less by the time you die (for example, if you have to spend on care costs), then what started out as a small proportion of the estate ends up taking up the whole of the estate and leaves any residual beneficiaries with little or nothing. 

x44

I would also VERY STRONGLY recommend you change it to a fixed sum.

Where a charity is left a % of the residual then there is great incentive to start making trouble for the executor and to be fair they are by law as charities required to maximise their income.

There is plently of scope to do so in some cases - was the deceased's car sold for the maximum amount etc or was it sold on the cheap, how were the contents of the house valued and what happend to them.....etc etc

The snag is of course that some charity's go too far while at the same time there are some executors and families determined to deprive the charities listed in the will of some money.  One I saw was when a charity was left an "item" - strange to report the item no longer existed at death though in this case there was good evidence that the item was sold by the deceased some time prior - and they had forgotten about what their will (written decades ago) said.

I've been an executor where I was the main residual beneficienary and a charity was the other smaller one.  We went on for over two years disagreeing about this and that and getting their legal team to spend another 6 months replying. Others I've seen where I was helping the executor where most of the money went to a whole host of charities and the executorship went on for 4+ years.

I would always recommend that where a charity is left a %, and the estate is reasonably large then the executor employs the solicitor to do a lot of the work - it will keep the charity from being too difficult if they know they are dealing with a fellow professional.

Spendless

I feel same way tbh though I have also read (on here) that it tends to be the bigger charities who do this and smaller ones don't always know anything about anything left to them till they receive the money.

If you can afford it then you can make charity donations with what you have during your lifetime and keep them out of your wills altogether (the approach I am taking) 

p00hsticks

x44 said:

I would also VERY STRONGLY recommend you change it to a fixed sum.

I reiterate the caution that I said above. The OP currently is leaving 10% of a currently seven figure estate to charity - that's around £100k. Change it from a percentage to a fixed sum of £100k, and if care home fees or similar wipe out much of the estate before they die, then leaving a fixed sum ends up with the charity getting a far larger proportion of the estate than was originally intended, and any residual beneficiaries with little or nothing.

FlorayG

I can't leave a fixed sum; I don't know how much I will be worth when I die. It might be over £500,000 if I die suddenly and unexpectedly one day or it might be nothing if I spend 10 years in a care home.
My will leaves X% to various people and then 'the balance of the estate' to a specific charity - is this better, or just as likely to cause grief for my executors?

poppystar

p00hsticks said:

I've been executor of a will that left sums to several mainstream charities and my personal experience is that the scare stories were unfounded - the charities contacted me politely once they picked up via the probate grant that they had been mentioned in the will, but once I acknowledged them and told them that the money would only be available once a property had been sold, they left me to it and didn't chase at all. 

I've also seen the advice mentioned by @sammyjammy to leave a fixed sum rather than a percentage, but the problem wit that is that if your estate is worth substantially less by the time you die (for example, if you have to spend on care costs), then what started out as a small proportion of the estate ends up taking up the whole of the estate and leaves any residual beneficiaries with little or nothing. 

This is worrying me at the moment. Whilst I do regularly update my will I am beginning to worry about what would happen if I was no longer able to do that and was eating into money to pay for care. The absolute amounts currently left to charity would take an increasingly large percentage of the estate over time. I think that next time I will change to a percentage method although I can see this could also be a hassle for executors regarding IHT calculations. 

My father executed an estate where charities benefitted big time and he sent a letter to each of them after they made contact effectively and strongly saying don’t bother us until we’ve sorted the estate out, we know you are there. AIUI the charities then waited reasonable patiently. 

probate_slave

My aunt gave 10% of the residue of her estate to the Charities Aid Foundation. The Foundation distinguished themselves by refusing to accept HMRC's calculation of IHT. The calculation is complex and recursive and HMRC outsource it to actuaries. This added many months to the administration, but in HMRC's current beleaguered state where every letter waits 6 months for a reply, the delay would be years. I wouldn't put my own executors through this.
Even the 10% clause in the Will is fraught with risk as to HMRC agreeing the lower rate, though solicitors have mostly figured it out by now.

Marcon

CarolWHerts said:

In our latest wills we included a provision to leave 10% shared between four named large charities on the understanding that this would reduce the overall IHT rate. We're talking of an estate in the low seven figures (if our main plan of spending the lot doesn't work). However I've been disturbed recently by stories of charities included in this way rapaciously pursuing executors for their share. Whereas we've always been committed charity supporters, and really want to leave some money for charitable purposes (the kids are getting plenty), having recently been executor for my parents, the last thing I would have wanted at that time would be hassle from overenthusiastic charity lawyers. Am I overthinking this? Should I stop reading online horror stories or change this when we next review our wills (we're in our 60s so hopefully a long time to go and achieve those spending targets). 
Edited to clarify that my children are the executors. 

Nothing ever loses in the telling! Stop reading the horror stories.

One way around the problem is to have a provision leaving 10% to the four charities concerned, divided up as the executors see fit ('at their entire discretion' should do the trick). The charities won't know about the bequests until probate has been granted, at which point the will becomes a public document. If your children are approached, a simple letter confirming that they will be in touch once they are in a position to arrange payment but are unable to enter in to further correspondence before then is all they need to do.