8 March 2011

Legacies amongst childless rise to £35,000

Over three quarters (78%) of wealthier parents plan to leave an inheritance, of which an average of £10,394 or 3% of their total assets will go to charity, according to a new study by Heartwood Wealth Management.¹

Heartwood’s research, which examines attitudes towards inheritance planning by affluent social groups, reveals that amongst childless wealthy people the percentage of their inheritance that will go to charity more than quadruples to 13.2%, an average of £35,564 each. 

When asked why people didn’t leave more of their estate to charity, nearly one in ten respondents (9%) said they didn’t trust charities to spend it efficiently.  A third (33%) felt they already donated enough money to charities while half (50%) preferred to keep their inheritance in the family.  On average, 84% of an inheritance is earmarked for children and grandchildren, Heartwood’s survey reveals.

On a regional basis, people living in the East Midlands intend to leave the greatest portion of their estate (6.7%) to charity while those in Wales plan to bequeath the smallest percentage (0.7%).

Lesley Britton, Head of Tax Solutions, Heartwood comments: “It’s not uncommon for the superwealthy to bequeath a large portion of their assets to charity as many feel their family and friends will already receive more than enough when they die.  Furthermore, charitable donations are free from inheritance tax, which is applied at 40% on an estate worth more than £325,000.   For example, Paris Hilton’s’ super wealthy grandfather Barron plans to leave 97% of his assets to charity.  But the situation is very different amongst comfortably off people where charitable contributions tend to be a relatively minor percentage of their estate. 

“Charitable giving is a highly personal choice but financially it makes sense for those who are so inclined to leave a portion of their inheritance to a good cause, either through their will or a trust.” 

¹ Bespoke survey by Opinium Research, 1,041 UK adults aged 45+ of social grade A or B, survey conducted 22-25 November 2010