In their Wills, a married couple wish to leave their respective shares in their home in a simple life interest trust for the survivor, on first death, passing to their children on death of the survivor, with the residuary estate passing to the survivor. On second death they wish to include a 10% charity legacy with the residuary estate passing to their children.
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To qualify for IHT charity legacy relief, can the gift in the Will be made to trustees to distribute among charities at their discretion, with a request to follow a letter of wishes?
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Can the charity gift refer to the general component of their estate only (using e.g. standard Kessler precedent)? If so, will the gift and and the relief apply to the general component only? Leaving the settled property element of the survivor’s IHT estate out of the gift and subject to IHT at 40%?
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Alternatively, as the beneficiaries of the residuary estate and the IPDI are the same (so the outcome is predictable), should/can the gift be worded to include the settled property component as well as the general component?
Many thanks for your help…