Gifts in wills – FAQs

A will is a legal document, formally witnessed and signed, which lets you decide what happens to your money, property and possessions after your death. You can also detail other important arrangements such as the guardianship of children or your funeral wishes in this document.

Once their loved ones have been provided for, some people choose to include a gift to causes that are close to their hearts when drawing up their will.

Writing or reviewing your will is one of the most important things you can do. Having an up-to-date copy makes it much easier for your loved ones to follow your wishes when you're gone, avoiding any unnecessary stress and red-tape during a very difficult time.

If you don't have a valid will, your personal wishes may not be followed. In this case, everything you own will be shared according to the laws of 'intestacy', which are the government's way of deciding how everything you own should be split. With most of the UK not having a will in place, these laws do come into effect quite often. You may have had experience of, or at least know someone who has known, the burden this can place on a family. On average, dying 'intestate' (i.e. without a valid will) costs £9,700 in lost assets.

If at least 10% of your taxable estate is left to charity, the inheritance tax rate for the rest of your estate drops from 40% to 36%. There is no obligation to leave us a gift. But, if you choose to, you'll be making a life-changing difference for people with dual sensory loss for generations to come.

Anytime. No matter what stage of life you are at, everyone has something to leave, be it personal items, furniture, property or simply the cash in your bank account.

Experts advise updating your will every five years, or after significant life events. Health issues, marriages, the birth of children, and even new business ventures could change your circumstances.

Not sure you need a will at all? Take this short quiz to find out and to speak to an expert.

If you don't have a will in place, you can write your will online in as little as 15 minutes through Deafblind UK's partnership with leading will writers Octopus Legacy.

Yes! Experts advise updating your will every five years, or after significant life events. Health issues, marriages, the birth of children, and even new business ventures could change your circumstances.

If the change is minor - for example removing or adding a beneficiary - you can create a Codicil, which acts as a supplement to your will without having to rewrite the entire original will document. Always consult your solicitor on your proposed changes so they can advice you on the best approach.

Wills made through Octopus Legacy can be updated whenever you like, for free in your first year, and only £10 a year after that.

It's time to update your will whenever you have a change in your circumstances. For example, you get married or enter into a civil partnership, when you purchase a property, or when you have children.

Or, whenever you would like to change what happens to the things you'll leave behind.

A mirror will is where spouses, civil partners or cohabitees produce a set of wills that reflect one another. The terms are the same in each document, but reflected. For example, they might leave everything to each other in the first instance, and then to the same beneficiaries on the second death.

If you don't make a will, then your estate will go under the intestacy provisions. This means they won't necessarily go where you want them to go. A will is the only way of ensuring everything you own goes to the people and causes you care about.

It's important you let those you trust know your wishes, and the best way is by having a valid will.

Anyone you know, and trust, to carry out your wishes when you're gone. Being an executor can be a difficult job. It's a good idea to speak to them when drawing up your will to check they are comfortable taking on the role.

You can also appoint a 'professional executor' to administer your estate. This could be your solicitor, or a Probate Practitioner, for example.

If you are an executor and would like to let Deafblind UK know about a gift, please contact us on 0800 132320.

A trust can be a useful tool to provide financial provisions for a disabled or vulnerable person throughout their lifetime. The type of trust required depends on your personal circumstances, the flexibility needed and the value and type of assets involved.

The two main options available are a Discretionary Trust and a Disabled Person’s Trust.

Discretionary Trusts

A Discretionary Trust is a type of trust used where more than one person may benefit, and it’s for the trustees to decide how and when those people will benefit. In a Discretionary Trust the trustees have complete flexibility in deciding how they use the income and capital in the trust fund for the beneficiaries.

The beneficiaries do not have any fixed entitlement to receive money from the trust, they only have a potential right to receive a benefit.

For the trust to be completely ‘discretionary’ there has to be more than one beneficiary. Along with your disabled or vulnerable child, the Beneficiaries might include other children, grandchildren and possibly a charity.

The advantage of a Discretionary Trust is that the trustees can make decisions to meet the changing requirements of any of the beneficiaries, including the disabled or vulnerable person. The trustees can use their discretion to use any amounts of capital or income for the beneficiaries depending on their needs.

Although a Discretionary Trust is very useful, the tax treatment is not favourable and needs to be carefully considered. If the value of the trust exceeds the inheritance tax threshold (currently £325,000) there will be an inheritance tax charge when the trust is set up. There will also be an inheritance tax charge every ten years and, then whenever a payment is made from the trust.

As the beneficiaries are not ‘entitled’ to receive anything from the trust, the trust assets held by the trustees should not be taken into account when assessing any of the beneficiaries’ entitlement to means-tested benefits or support.

Where a beneficiary is receiving means-tested benefits or support, the trustees need to be careful how they use the assets. The assets should not be used in a way which endangers any future claim for means-tested benefits or support. For example, paying for a holiday for the beneficiary is fine but giving them a lump sum may not be.

Disabled Person's Trusts

A Disabled Person's Trust is a trust set up to specifically benefit a ‘disabled person’ and is largely discretionary in its nature.

This means the trustees are in control of how the trust will be administered as mentioned above for Discretionary Trusts.

For the purposes of a DPT, a person is defined as disabled if one or more of the following apply:

• They are incapable of administering their own property or managing their own affairs due to mental disorder within the meaning of the Mental Health Act 1983.
• They are receiving one of the following benefits:
  • Attendance Allowance
  • Disability Living Allowance (DLA) based on entitlement to the care component at the highest or middle rate, or the mobility component at the higher rate
  • Personal Independence Payment (PIP)
• They would be entitled to receive one of the above benefits if they could satisfy prescribed conditions as to residence or presence in the UK.
• They would be entitled to receive one of the above benefits but for being in a state-funded institution, e.g. a care home or hospital.

The main advantage of a DPT over a Discretionary Trust is the favourable tax treatment it receives for inheritance tax, income tax and capital gains tax. In order to qualify for the favourable tax treatment, the trust must provide that during the disabled person’s life, the income and capital will be entirely used for the benefit of the disabled person.

This is subject to a small exception that a total of either £3,000 or 3% (which ever is the least) of the value of the trust fund (either income or capital) can be applied to another beneficiary or beneficiaries of the trust in each tax year. If these conditions are met, the trust will not incur any charges to inheritance tax when payments are made from the trust and the ten yearly inheritance tax charges incurred by a Discretionary Trust will not apply. For income tax and capital gains tax, the trustees have to make an election to HM Revenue & Customs for favourable tax treatment. The effect of this is to have the income and gains taxed as if the trust fund belongs to the disabled person.

The tax is currently charged at 40% on anything above £325,000. So, if your estate is worth £500,000, inheritance tax at 40% would need to be paid on £175,000. That means £70,000 would be payable to HMRC, which would be taken out of your estate before your wishes were carried out.

But if you own your own home, then your tax-free threshold can increase from £325,000 to £500,000. This is as long as you leave your property to your children or grandchildren, and your estate is under £2 million. You can find out more about this by visiting gov.uk/inheritance-tax

(Inheritance tax thresholds currently frozen to 2029–30 tax year)

Yes. You can bring the value of your estate below the inheritance tax threshold during your life, by giving away lump sums to your family and friends. You don’t need to pay tax on gifts you make to your husband, wife or civil partner. If you give money, property or shares to other relatives or friends – and you live for 7 years or more after that – again, you won’t need to pay inheritance tax on those gifts. But if you die within 7 years, tax is payable on a sliding scale.

You can keep up to date with this information at gov.uk/inheritance-tax/gifts

Gifts to charity in your will are tax-free

If you put a gift in your will to Deafblind UK, it will be taken from the value of your estate before HMRC calculates how much inheritance tax, if any, is payable.

If at least 10% of your taxable estate is left to charity, the inheritance tax rate for the rest of your estate drops from 40% to 36%. There is no obligation to leave us a gift. But, if you choose to, you'll be making a life-changing difference for people with dual sensory loss for generations to come.