Collaborative legacy management transforms lives

Collaborative legacy management transforms lives

As a legacy professional who previously worked as a private client solicitor, I read with interest the recent articles about how best to approach the inclusion of a gift to a charity within a client’s will.

During my time in private practice, I worked in three different firms and witnessed the varying approaches taken to this topic, which ranged from an open-minded / objective approach to the very opposite. The theme at one firm was that naming a charity as a residuary beneficiary had the potential to cause problems and clients should be made aware of this and even warned against including such a gift.

It therefore came as little surprise to me when I entered the world of legacy administration that a small number of firms do not expect or appreciate the additional interest charities are obliged to take in how estates are being dealt with. As touched upon by both Mr Culver and Ms Johnson, charities do have additional requirements that personal beneficiaries do not – needless to say, we are a highly regulated sector.

I have now gained experience of approaching estate administrations from both sides of the fence. Refreshingly, I have found that many (if not most) solicitors are happy to share information and include the charity in decision-making, particularly where the amount of our eventual gift will be affected.

Building a good relationship between Executors and legacy professionals can be mutually beneficial, and can often lead to a smoother process for all involved. As Mr Culver points out, legacy officers will be familiar with how best to maximise any gift the charity has been left and, amongst many other things, should be well-versed in how the treatment of IHT and CGT should be approached to avoid these taxes being paid unnecessarily (which can of course benefit not only the charities involved but also potentially other personal beneficiaries too). Should any errors in tax treatment not be spotted until the final estate accounts or, worse still, after the estate had been distributed, this often leads to more work having to resolve the situation.

A simple example I can give of the benefits of sharing information arose on a case where my charity had been left a 10% share of the residuary estate. The solicitor shared a copy of the IHT400, from which I noticed that the 36% IHT rate that should apply had not been claimed, nor had the gift to charity been reflected as an exempt gift for IHT purposes. I was therefore able to let him know my thoughts, with which he agreed, and he was able to submit a corrective account.

It is also worth noting that, like law firms, different charities employ different approaches in going about managing their legacy cases. However, we do work closely together and often try to co-ordinate responses via a ‘lead’ charity – to avoid the instructed solicitor having to communicate with several beneficiaries who all have similar requirements. The idea is that this will save the solicitor (and therefore the estate) time and cost, and make the process wholly more straight-forward.

Legacy professionals are always keen to work collaboratively with solicitors – many of us are solicitors too and may have gained invaluable knowledge about the niche area of charity legacies, which we are enthusiastic to share.

Above all, our goal is to ensure that the wishes of our supporters are followed and that the generous gifts left to us are utilised as the supporter intended. On average, it costs WaterAid just £15 to reach someone with clean water, so even a modest IHT saving (for example), can help us transform lives.

 

Alison Rirsch is a Legacy Manager at WaterAid and a member of the Institute of Legacy Management

TWP Main Admin

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