Two questions come up about legacies in small charities, and neither is the one the sector writes about.
The first is what you are allowed to say to a supporter who mentions leaving you something. The second is what to do when a solicitor’s letter arrives telling you a legacy is coming and nobody has dealt with one before.
The short answers: you can tell people the facts and give them your registered details, and you must not advise on their will. And a legacy does not go into your accounts on the day you hear about it.
If legacy income is starting to feature in your planning, that belongs in your wider fundraising strategy rather than sitting on its own.
What you can say without giving advice
The Code of Fundraising Practice treats legacies as a sensitive area and sets standards designed to keep role boundaries clear.
Any information you give someone to include in their will has to be clear and accurate, and you must be explicit that suggested wording is not legal advice. Where you do offer wording, it has to carry your charity’s full name and address and your registration details, including the charity number. Getting the name wrong is the most common reason a legacy goes to the wrong organisation or fails altogether, so the details matter more than the prose around them.
The Code also asks you to consider two things in any legacy fundraising: the freedom of the person making the will to provide for their family and others, and any sensitive circumstances affecting them, their family or their friends, where you know about them.
Where conversations happen face to face, the standards get more specific. Be open about why you have invited someone to an event where legacies will be discussed. Do not behave in a way that could be seen as unreasonably pressurising. Hold meetings in a way that is sensitive to the person’s interests and concerns. Keep a record of meetings and communications. And accept that they can bring other people, decline the meeting, or end it whenever they want.
That last set is worth reading twice if your legacy conversations tend to happen over tea in someone’s front room, which in a small charity they usually do.
The tax position, stated properly
Gifts to UK charities are exempt from inheritance tax. Not usually, not often – exempt, with no upper limit on the amount.
There is a second point that gets missed. Where someone leaves 10% or more of the net value of their estate to charity, the inheritance tax rate on the rest of the estate drops from 40% to 36%. That can mean a charitable gift costs the family considerably less than its face value, and on some estates the arithmetic works out better for everyone.
You can state both of those facts. What you cannot do is work out whether they apply to a particular person’s estate, because that is advice, and the calculation involves nil rate bands, estate components and elections that a solicitor handles. Say the rule exists, then send them to someone qualified.
First legacy on its way and no policy in place?
The gap in most small charities is not enthusiasm for legacy income – it is that nobody has decided who talks to the executor, who signs off acceptance, or how the money will be treated once it lands. A free Charity Consultation is a reasonable place to work out what you need before it arrives.
Paying for someone’s will
Some charities offer to cover the cost of a supporter’s will, or partner with a will-writing service. The Code is blunt that there are considerable risks in this, and sets conditions if you go ahead.
You must not make the charity receiving a legacy, or being appointed executor, a condition of paying for the will. You must give clear information about what is being offered and what the person’s options are.
If you use a will-writing partner, that means telling them what level of legal advice the partner provides, offering at least two providers to choose from without recommending one, and making clear that the partner acts only in the person’s interests and on their instructions. If you are not using a partner, it means recommending they take independent legal advice.
For a charity under £1m, my read is that the risk usually outweighs the return here. The conditions are manageable, but the perception problem is not, and a family who feel the charity steered the will is a family who may contest it.
When the offer is to a person, not the charity
Close relationships form between fundraisers and supporters, and the Code addresses what happens when that tips over.
Fundraisers must not draft, or be directly involved in drafting, wills in their own favour, and they must tell the charity about any offer of a personal legacy rather than one to the organisation. The charity, in turn, must have a procedure for handling those situations, and must follow disciplinary procedures where someone has taken advantage of their position.
Small charities need to read “fundraiser” broadly here. The person having legacy conversations is often a trustee, the chief executive, or a long-standing volunteer, and the risk is the same whatever their title. A trustee named personally in a supporter’s will is a conflict that has to be declared and recorded.
There is a related point on executors. If someone asks your charity, or one of your officers or employees, to act as executor, the Code requires you to consider whether you have the legal power to do it, whether it is in the charity’s best interests, and what risks or conflicts it creates. The answer for most small charities is no, and saying so early is kinder than saying so later.
A legacy arrives. What now?
Start with the conditions. A will may say the gift must be used for a particular purpose or project, or set terms about how you acknowledge it. You need to work out whether you can meet those conditions before you accept, and you may need independent legal advice to do it. If you cannot meet them, the Code’s position is that you should not accept the legacy.
A legacy left for a stated purpose is restricted income, and the rules on restricted and unrestricted funds govern what you can do with it from that point on. A restricted legacy that arrives without anyone noticing the restriction is a problem that surfaces years later, usually during an examination.
Then the accounting. SORP 2026 says legacy income is recognised when receipt is probable, and the value can be measured reliably. Receipt is normally probable when three things are true: probate has been granted, the executors have established there are enough assets in the estate to pay the legacy after settling liabilities, and any conditions attached are either met or within your control.
Hearing that you have been left something does not meet that test. Nor does an executor’s early estimate before the estate is settled. Valuations and disputes both bear on the judgement, and where a legacy meets the definition of an asset without meeting the recognition criteria, you can choose to disclose it as a contingent asset instead – which is often the honest position for a charity waiting on a contested estate.
Two situations catch people out. Where a legacy is subject to a life interest – someone else has use of the asset for their lifetime – it is not recognised until that person dies, which may be decades. And where distribution is deferred more than a year, a material legacy may need discounting.
The shortcuts available to large charities are not available to you. SORP allows a portfolio approach for organisations receiving many small legacies with good historical data, and rules it out for material legacies or where a charity receives them infrequently. A small charity assesses each one individually.
What the board should settle before the first one arrives
A short written policy covering five things saves a great deal of trouble: who speaks to executors and solicitors, who decides whether to accept a legacy with conditions attached, when the charity takes independent legal advice, how legacy income is recognised in the accounts, and what happens if a trustee or member of staff is named personally.
There is a strategic question underneath it. A single large legacy in a small charity distorts one year’s accounts and can look, to anyone reading them, like growth that is not there. Trustees need to decide in advance how a windfall is treated – spent, designated, or held – and to explain it in the trustees’ annual report so nobody misreads the picture. The same reasoning applies to any large non-cash gift, and the treatment sits alongside the rules on in-kind support.
If the legacy is a house, a share portfolio or a collection rather than cash, add a sixth question: who values it, who sells it, and what it costs to hold in the meantime.
This article is general information for UK charities. It is not legal, tax or accounting advice, and nothing here should be passed to a supporter as guidance on their own will. Decisions about accepting a conditional legacy, recognising legacy income, or acting as executor should go to a solicitor or your independent examiner. The Charity Commission’s guidance on raising funds through wills and the Code of Fundraising Practice both set out the standards in full – the Code is worth reading alongside this.
If a legacy has arrived and you are working out what it means for your reserves, your plans and the next three years, that is a charity strategy question rather than a fundraising one.
