The Art of Green Finance

What is a legacy? Most people think of a legacy as a financial gift left in a will, but the term can also be used to emcompass anything passed down from generation to generation or within communities. Using this broader definition, almost everyone leaves a legacy, regardless of wealth.

I recently read an old newpaper interview with the broadcaster Mishal Husain, in which she talked about the death of her father and the Islamic concept of legacy. Muslims are taught that when someone dies, only 3 things remain of the person. The first two of these are; an ongoing act of charity, and, knowledge from which others benefit. Both of these resonated strongly with me. The third pillar is of less relevance to those who do not have a religious background.

Knowledge from which others benefit could be as simple as recipes written down and handed down to the next generation. But knowledge does not have to be written; it can also be skills (cooking, sewing, knitting, foraging etc) or values passed down from generation to generation, such as passing on a love of nature. Some people may choose to share their skills on a voluntary basis in local organisations. On a professional level, knowledge sharing can be achieved by teaching and mentoring, or by creating and sharing resources.

Examples of ongoing acts of charity could include funding education projects, funding clean water projects or planting crops or trees. Medical reasearch projects could also be encompassed and Mishal Husain talked about how her father’s body had been donated to medical science for this reason.

The seventh generation concept comes from the North American Haudenosaunee Confederacy and is the principle that decisions by the current generation should be beneficial for the 7th generation ahead, or, 150 years into the future. Trees planted today may certainly fall under that category, although some trees such as fruit trees have a considerably shorter time span than this. Actions against pollution, nature loss and climate change will also benefit future generations.

How should my wealth be distributed after I’m gone?

Thinking about legacy will inevitably also include thoughts about money or wealth, or possibly lack thereof. For anyone with dependants, it is important to consider how they would manage financially if the worst were to happen to you. You may have an element of life insurance cover as part of your employment contract or pension, so check these first. If you don’t have any employment or pension cover and think your dependants would struggle, before doing anything else, look at arranging life insurance. This can cost as little as 5 pounds per month.

For lots of people, their main asset is their home, or possibly, part of their home, with the bank owning the rest. If you have a spouse or partner and dependants, the house and the majority of your assets should probably be passed directly to your spouse or partner to help with the financial realities of looking after dependants. If you have no spouse or partner, but you do have dependants, then think about who would care for your dependants in the event of your death, and distribute your assets accordingly.

If you are confident that your spouse/partner and dependants would be well taken care of, you may wish to leave other assets, which may include personal possessions, savings or investments, to other family members. This may include parents, siblings and grandchildren or great-grandchildren.

As part of your legacy, you may also want to consider leaving money to charity. If your spouse or partner and your dependants would stuggle financially after your passing, this may not be appropriate. However, many people may be able to afford to donate a percentage of their wealth to charity after their passing. For wealthier people, a donation of 10% of the estate qualifies for a reduced rate of inheritance tax in the UK.

How to write a will

If your affairs are fairly straightforward, then it may be possible to write a will for free via a charity that you support or wish to support. For example, the World Land Trust has a free will writing service via Farewill.

If you have a more complex family set up, have property abroad or own a business, you will probably need the help of a solicitor to draft a will. Will aid is a partnership between solicitors and charities that allows for wills to be drafted by a solicitor at low cost whilst raising money for charity. Particularly complex wills may incur an extra fee, even via this route.