What Is A Legacy?
People tend to associate the term ‘legacy’ with charities: leaving money to a good cause that you care about strongly.
Actually, a legacy can be more than that. And it doesn’t necessarily have to go to charity – though we’d be the first to agree that donating money to a worthy cause is laudable.
A legacy is simply a gift or bequest left in a person’s will. It can be either a specific sum of money, a particular item or property, or a percentage of the estate.
Legacies are a way to leave something behind after you’ve gone. They can make a real difference to the world. The RNLI estimates that six in every 10 lifeboat launches are funded by charitable bequests.
Types Of Legacies
The person who leaves a legacy is known as the testator (the person who makes the will) while the person who receives the legacy is the legatee. Legacies can be either specific, general, or residuary:
- A specific legacy is a gift of a particular item or property, such as a piece of jewellery or a house.
- A general legacy is a gift of a specific sum of money, such as £10,000.
- A residuary legacy is a gift of a percentage of the testator’s estate after all other gifts and expenses have been paid.
Who Can Receive A Legacy?
Legacies can be left to anyone the testator chooses. That could include family members, friends, charities or other organisations. There are no restrictions on who can receive a legacy, as long as the person or organisation is capable of receiving it.
Benefits Of Leaving A Legacy
There are positives to be gained from leaving a legacy:
- Making a difference: By leaving a legacy to a charity or organisation, you can make a positive impact on the world – one that will be remembered and treasured after your passing.
- Personal values: Legacies can reflect your personal values and beliefs, allowing you to support causes and organisations that are important to you.
- Tax benefits: Leaving a legacy to a charity can reduce your estate’s Inheritance Tax liability. Find out more about that here.
- Family legacy: Bequests of this type enable you to support causes that are important not just to you but also to your loved ones. You can associate your family name with a good cause.
- Sense of purpose: Leaving a legacy can provide you with a greater sense of fulfilment, by allowing you to make a meaningful contribution to the world.
Pitfalls Of Leaving A Legacy
Sadly, there are some disadvantages or risks associated with leaving a legacy to charity – particularly if the bequest is a very generous one. These include:
- Disinheriting family members: Leaving a legacy to charity can sometimes result in family members receiving little or nothing. This may cause hurt feelings or bitterness.
- Risk of legal disputes: Leaving a legacy can increase the risk of litigation. Relatives who feel they have been unfairly disinherited may contest the will, leading to potentially costly and time-consuming legal proceedings. The example we tend to quote in this instance is the Dickensian ‘Bleak House’ scenario – in which a legal squabble over an estate was so long and costly that, in the end, there was nothing left to fight over.
- Complexities of estate administration: Legacies can sometimes complicate the process of administering an estate. Executors may need to sell assets or liquidate investments to raise the cash needed to pay legacies. This can be time-consuming and costly.
- Uncertainty of future needs: Legatees may not always be able to use the legacy in the way that the testator intended. For example, a charity that the testator intended to support may no longer exist at the time of the legacy. Additionally, the legatee’s needs or circumstances may change, making the legacy less useful or desirable (unless it’s in the form of money – which seldom goes unwanted).
Disputed Legacies
The law allows certain individuals – such as spouses, children, and other dependents – to make a claim against an estate if they feel that they haven’t been adequately provided for in the will.
This is known as a claim under the Inheritance (Provision for Family and Dependants) Act 1975. In order to make a claim, the individual must show that they were financially dependent on the deceased, and that the deceased did not provide for them adequately in the will.
People who may have a right to contest your will are:
- your spouse or civil partner
- your partner – provided that you’ve lived as man and wife or as civil partners for at least two years before your death
- any former wife or civil partner – provided that she or he has not remarried or has not entered into a subsequent civil partnership (or an order of the court bars any claim)
- any child of yours
- any person who was not your own child but – in any marriage of yours – was treated by you as a child
- any other person who before your death was being maintained wholly or in part by you.
Courts will consider various factors when determining whether to grant the claim. These include the:
- size and nature of the estate
- financial needs and resources of the claimant
- conduct of the claimant and the deceased.
More wills are now being contested. The most common reasons for disputes are concerns over the mental capacity of the testator, family conflicts, and issues with the distribution of assets.
A survey by Direct Line suggested that one-in-four people would be prepared to contest a loved one’s will if they were unhappy with it.
Can You Leave A Legacy To A Pet?
One of the most interesting will instructions I had in my 29 years of practice was from an elderly lady who wished to leave her entire estate to her pet dog.
Unfortunately, this was not possible because the law regards a pet as a chattel (an item of property other than freehold land) – rather than a legal entity. Therefore, pets cannot benefit from wills.
But pets are important. They’re much-loved members of the family. You want to be sure that they’ll be well cared for after you’ve gone. Fortunately, there are other ways to ensure this happens.
One option is to set up a pet trust. This is a legal arrangement that provides for the care of a pet after the owner’s death. The trust is run by a trustee, who is responsible for managing the assets and ensuring that your pet is cared for according to your wishes.
Another option is to make arrangements with a friend or family member to care for the pet after your death. This can be done informally or through a formal agreement, such as a letter of wishes or a contract.
Further Reading
- How Millionaires (And You) Can Avoid Paying Inheritance Tax. Read more…
- Do All Wills Have To Go Through Probate? Read more…
- Will My Partner Automatically Inherit My Estate When I Die? Read more…
- How Can A STEP Wills And Probate Solicitor Help Me? Read more…
- How Does Equity Release Work? Read more…
Get Expert Legal Advice On Legacies
Contact Coles Miller Partner Anthony Weber, Head of Wills and Probate for specialist legal advice on legacies, wills, probate, powers of attorney, living wills, administration of estates, and equity release. He is accredited by Solicitors for the Elderly, helping elderly or vulnerable people to manage their affairs.
Anthony’s work includes dealing with the Office of the Public Guardian and the appointment of deputies to manage the affairs of those who have lost mental capacity. He is based at our Fleetsbridge office.
