Quarter Of Retirees Exclude Family Beneficiaries In Wills

Over a quarter (28%) of pensioners plan to leave their estate to beneficiaries other than close family members.

Those young people who are increasingly reliant on inheritance and gifts to buy property may well be disappointed in this revelation.

There are multiple reasons why retirees shun family beneficiaries, one of which is estrangement, but the older generation also wishes to bequeath friends and neighbours who have supported them in the later stages of their life rather than immediate family who live far away.

Leaving a legacy or gift to charities is becoming more popular too; especially animal charities. Awareness of Legacy giving and the associated inheritance tax benefits of charitable giving is now reaching the public and changing misapprehensions of legacy giving.

Last month, a charity consortium, Remember A Charity asked Wills professionals to support their Legacy Campaign by committing to inform clients about legacy giving and the relevant tax breaks – as a gift of just 10% of a testator’s estate to a charity reduces the tax rate on the whole estate from 40% to 36%.

The campaign saw 1,300 solicitors and Will-writers joining a consortium of 200 charities to change Brit’s perceptions of leaving a charitable gift in a Will.

Rob Cope, Director of Remember A Charity, says:  

“The nation’s appetite for legacy giving is growing but there is a disconnect between the proportion of people that intend to leave a gift in their Will (40% of the over 40s) and the 6% that actually do so. Although the large majority of people understand they can leave a gift in their Will, there is often the assumption that charitable bequests have to be particularly large, that they are complex to arrange or that they might prevent their children from inheriting…..”

Another reason why senior will-makers do not bequeath their descendants is that donors want their younger relatives to ‘make their own way’ in life rather than relying on inheritance from their parents who have worked tirelessly all their lives to enjoy the fruits of their labour later in life.

Furthermore, due to a damning social care system, many retirees are worried about how they are going to fund their care costs later in life – with almost a quarter of homeowners planning to use the equity in their homes to pay for care fees in old age.

However, those wishing to leave out family beneficiaries in favour of charities or third parties need to think about whether disgruntled family members could bring a successful claim under the Inheritance Act (Provision for Family and Dependants) Act 1975.

An uptake in discontented family members disputing inheritance in the courts and challenging the validity of Wills means that testators and legal service providers should address whether a claim could be brought against the estate when drafting a Will.

 As a Will writer, are more testators leaving out family beneficiaries and favouring charities and third parties instead? 

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