Legal and financial complexities are preventing many wealthy families from leaving money to charities in their wills, according to new research from Rathbones.
The wealth manager’s study of high-net-worth families, with average wealth exceeding £3m, found that 42% view bureaucracy as the main barrier to including charitable giving in estate plans.
A further 39% said they lacked knowledge of non-profit options, while 26% admitted they were unsure where to begin.
Tax considerations, structuring donations and ensuring compliance with charity law were among the obstacles cited.
Despite these challenges, charitable intent remains strong. More than half of respondents (53%) have increased donations in the past two years, and two-thirds (66%) expect to give more in the next two.
Almost two-thirds (62%) have already included a charitable gift in their will, averaging £233,000, while 83% of those without a will intend to write one within three years including a charitable gift.
The research also showed that a fifth of wealthy families were unaware of the inheritance tax benefits of charitable giving.
Donating at least 10% of a net estate to charity reduces the inheritance tax rate on the remainder from 40% to 36%. Once aware, 84% of families said they would consider leaving 10% of their estate to charity.
The study revealed growing engagement with professional advice on philanthropy. Seven in ten families expect to discuss charitable giving with their financial adviser in the next five years, compared with just over half who have already done so.
Similar increases are expected in discussions with lawyers and accountants. Non-cash assets such as property, investments and personal items are also increasingly being considered, with one in ten already planning such gifts and a further 82% likely to do so.
To support these intentions, Rathbones is launching its Donor Advised Funds, a tax-efficient structure enabling clients to donate, invest contributions tax-free and involve family members as successor advisers to continue their legacy.
