In recent years, there has been a significant shift in how individuals approach their investments. According to Forbes, there has been a notable increase in ethical investing, and The Financial Times reports substantial growth in sustainable investment. Charitable gifting in Wills is also on the rise, driven not only by tax incentives but also by a growing awareness and emphasis on social responsibility and philanthropy.

As professional advisors, it’s essential to help clients align their estate plans with their values. Here are our top tips for incorporating philanthropy and ethical investing into estate plans:

1. Be specific about charitable gifts – clearly outline charitable gifts in the Will and any specific purposes for the donation. Specific gifts comply with legal and tax regulations, avoiding potential tax issues and ensuring the estate benefits from available deductions. Not only this, but it also helps to ensure that charitable gifts are used in the way they were intended. 
2. Create charitable Trusts – for more substantial gifts or ongoing support, consider setting up charitable Trusts. These Trusts can provide a continuous source of funding for chosen causes, reflecting the client’s long-term philanthropic goals. 
3. Mandate ethical investments – if setting up a Trust, include provisions that require the Trustee to consider ethical and sustainable factors when making investment decisions. Use or suggest the Environmental, Social, and Governance (ESG) criteria to guide investment choices. This includes companies that prioritise sustainability, ethical practices, and positive social impact. 
4. Choose the right Executors – counsel clients on the importance of selecting Executors or Trustees who understand and align with their values. 
5. Create an accompanying Letter of Wishes – detailed explanations help beneficiaries understand your client’s values and reasons for the donations they’re making, fostering respect and appreciation for their legacy. 
6. Find legitimate causes – help your client find well-established charities with good reputations and choose a backup should the initial choice stop operating. This ensures that your client’s charitable intentions are still fulfilled even if circumstances change.

Arken Professional makes it easy for you to draft your client’s Will and incorporate all their philanthropic goals. You can find charities and their details with a few clicks, build a Letter of Wishes with ease and add create a trust for a charitable purpose. 

Within Arken Professional, there are significant shortcuts, prompts and extensive clauses to enable you to draft testamentary gifts to charity with ease, including: 

• Different methods of implementing a clause gifting 10% of the estate value to charity to enable a reduction in the rate of Inheritance Tax to 36% – this can be done as a blanket clause, requiring the executor to do the calculation based on the value of the net estate at death or as a series of gifts to specific charities 
• The ability to split gifts between charities in percentage shares or equally 
• Where a gift is split between a charity and non-exempt beneficiaries, a prompt to determine whether the respective shares should be calculated before or after the calculation of Inheritance Tax, which brings in wording consistent with the results in Re Radcliffe and Re Benham respectively 
• A cy pres clause to ensure that gifts to defunct charities can still be passed to a charitable organisation with similar aims  
• Non-provision clauses and a notes area to record the reasons for testamentary decisions to help charities defend the will where disgruntled dependants and relatives have been disinherited in their favour. 

Furthermore, with Arken Lifetime, you can help your clients to establish a charitable purposes trust during their lifetime to enable them to see their philanthropic aims established and their money at work to achieve their charitable goals – and this trust can be further endowed by their Will – either by setting up an annuity to provide regular payments, or as a lump sum.