What to consider when writing a Will

Gifts left in Wills to Hospice in the Weald help to provide care and support to 1 in 4 of our patients. Read Buss Murton Law’s full article below for some advice on what to consider when writing a Will, and how you could help protect the future of your local hospice.

Written by Annelise Tyler, Buss Murton Law

Pecuniary and Residuary Gifts: What’s the Difference and Which Has the Greater Impact?

When making a Will, it is important to consider not only who should benefit from your estate, but also how those gifts are structured. Two of the most common types of monetary gifts are pecuniary gifts and residuary gifts, and the distinction between them can have a significant impact on the value ultimately received, particularly where a gift is being left to a charity.

Pecuniary Gifts

A pecuniary gift is a gift of a fixed sum of money, such as £1,000 to a grandchild, £5,000 to a friend or £10,000 to a charity.

The main advantage of a pecuniary gift is certainty. The beneficiary knows exactly what they will receive, regardless of the value of the estate. However, fixed sums do not automatically keep pace with inflation. A gift that seems generous today may be worth considerably less in real terms many years later unless the Will is regularly reviewed and updated.

Why Residuary Gifts Can Be Particularly Effective for Charities

Where charitable giving is concerned, a residuary gift often has a greater impact than a fixed cash gift.

A fixed gift of £5,000 remains £5,000, regardless of whether the estate is worth £100,000 or £2 million. By contrast, a gift of 2% of the residuary estate reflects the value of the estate at the date of death.

For example, if an estate is worth £1 million, a 2% residuary gift would provide £20,000 to the charity. Where property values, investments and savings increase over time, the charity shares proportionately in that growth.

‘When making a Will, it is important to consider not only who should benefit from your estate, but also how those gifts are structured.’ – Annelise, Buss Murton Law.

As a result, residuary gifts often retain their significance far better than pecuniary gifts and can provide charities with meaningful long-term support.

Charitable gifts to UK registered charities are made free of tax, so that the charity receives the full value of the gift and your estate pays less inheritance tax than would otherwise have been the case.

Choosing the Right Approach

Pecuniary gifts remain useful where certainty is important and are often suitable for family and friends. However, where the intention is to make a lasting and meaningful charitable contribution, a residuary gift will often provide greater flexibility and a potentially much larger benefit.

By leaving a share of residue rather than a fixed amount, your chosen charity can benefit in proportion to the value of your estate, helping your generosity retain its impact for years to come.