Legal technology within the Wills and Probate industry has evolved and is now transforming the world of legacy giving.
With technology changing the way the world communicates, its impact on business has been huge, fast-moving and continues to grow.
Those who work with Wills have started to see legal technology as a game-changer which can act as a driving force for increased efficiency and profitability.
It is only a relatively short space of time where those who draft Wills would have previously relied on simplistic software and written notes or paper instructions.
But the legal sector is now catching up to what clients expect with more and more firms/businesses looking at new systems so they can be more efficient. Using new technology has allowed businesses to grow, provides a much better service, saves time and in turn increases their revenue.
Those firms which have adopted legal tech in their will-making processes are revolutionising the face of legacy giving. Of course, there are other factors in play but essentially, new technology makes the process simpler, more efficient and cost-effective.
According to a recent report launched by the leading analysts of legacy fundraising, Legacy Foresight, predicts that Legacy and in-memory donations to UK charities will be worth twice as much in real terms in 25 years’ time, reaching £10 billion by 2045. This is largely due to more deaths, more will-making and a higher proportion of people leaving bequests.
Other than reducing IHT, the top charitable bequest motives are a desire to support a charity and the ultimate use of the gift by the charity, according to Legacy Voice and University of Plymouth’s Legacy Giving 2018 report. Interestingly, findings from the report cited the most significant changes in donor motivation was the increase in influence of professional advisors. A similar study was conducted in 1992 which found only 4% of participants had confirmed that a legal professional had suggested a bequest, but the figure climbed to 21% in 2000.The report suggested that by 2017 this figure would have crept up even higher.
Legacy income for charities is set to rise by 4% over the next five years with charities set to receive legacy increases in excess of £650 million.
Unfortunately, this increase in legacy income also coincides with a fall in life expectancy, according to recent death projections forecast by the Office for National Statistics (ONS).
The new report suggests that life expectancy is currently slowing for both men and women since 2011 following decades of consistent improvements.
This will lead to a noticeable rise in the number of projected deaths. ONS predictions estimate that 3.1 million people will die in the UK during the next five years up to 2024.
When compared with the last forecast prediction made in 2017 of 3 million deaths, it signifies that declining life expectancy rates could indicate a further 123,000 additional deaths not estimated in previous reports.
In terms of charitable legacies over the next five years, this could signify an increase of 4.1% or £650 million.
Legacy foresight has estimate that this could mean 26,000 additional people will die per year, each leaving an average legacy of £25,000, leading to an annual legacy income increase of £130 million.
Meg Abdy, Development Director at Legacy Foresight, says:
“Death rates are one of key factors that determine the number and size of bequests charities can expect to receive. In the short to medium term these new projections will boost charity income, especially among larger charities.”
“It’s important to remember that although improvements in life expectancy are not as optimistic as previously thought, people will still live longer on average than they do today. By 2050 1.5 million people will be aged 90 or over. This may be lower than the 1.8 million predicted back in 2016, but it’s still more than double the 600,000 we see today.”
A predicted rise in legacy giving over the next five years suggests charities are set to increasingly focus their fundraising activity on encouraging people to leave gifts in their will.
Legacy donation analyst Legacy Foresight believes there will be an extra 26,000 bequests from wills by 2024, with an average value each of £25,000. This could mean an extra £650m more legacy income for charities over the next five years.
The Legacy Foresight analysis follows latest death projections from the Office for National Statistics that by 2024 there will be 3.1m deaths, compared to 3m predicted in their last projections two years ago.
“Death rates are one of the key factors that determine the number and size of bequests charities can expect to receive,” said Legacy Foresight Development Director Meg Abdy.
“In the short to medium term these new projections will boost charity income, especially among larger charities.
New death projections from the Office for National Statistics published at the end of October will mean £650 million more in legacy income for UK charities over the next five years, according to analysis by Legacy Foresight.
This is an uplift of 4%, with Legacy Foresight predicting that bequests, or gifts to charities in Wills, should grow by an extra 26,000 in the five-year period, with an average value of £25,000.
According to the ONS’s figures, life expectancy increases have slowed considerably for both men and women since 2011, which in turn will drive up the projected number of deaths. Its latest forecasts predict that over the five years to 2024, 3.1 million people will die, compared to the 3.0 million anticipated in its last projections, produced in 2017.
Legacy Foresight says the new figures from the Office for National Statistics could lead to a 4 per cent increase in the value of charitable bequests
A rise in the number of deaths predicted by the Office for National Statistics over the next five years will result in £650m more legacy income for UK charities, according to Legacy Foresight.
The ONS figures, published at the end of last month, predict that 3.1 million people will die over the next five years to 2024, a rise from the three million deaths predicted in the last set of figures, produced in 2017.
The legacy consortium Legacy Foresight said the extra 123,000 predicted deaths would result in an increase of 4 per cent in the total value of legacy gifts to charities, to £16.25bn.
Legacy Foresight estimates there will be an extra 26,000 gifts, with an average value of £25,000.
It’s 25 years since our first analysis of legacy giving, when we were commissioned by a group of 13 major charities to produce 20-year forecasts of UK legacy incomes. After 25 years of presenting market reviews, sitting in on hundreds of forecasting presentations, writing thousands of words on legacy trends, it’s easy to think it’s all been said. Jaded? Never. Complacent? Well, maybe.
That’s why I love working with our Dutch and now, our Australian clients – they always teach you something new.
Last year, a group of eight Australian fundraisers came to the IoF Legacy conference on a study tour. At the post-conference dinner, they were joined by a contingent of Dutch fundraisers on their annual pilgrimage to the London event. Each of our ebullient Dutch clients decided to ‘adopt an Aussie’ for the evening – as you can imagine the conversations were lively (and the drinking spectacular!).
Following that memorable evening, we were invited to this year’s Include A Charity Week events across Australia, visiting five cities in five days, from Brisbane to Perth. We presented the results of a new project to forecast the Australian legacy sector over the next 20 years; bringing us full circle with our very first project 25 years ago.
On first impression, just how different could the Australian legacy sector be to ours in the UK? They speak the same language (sort of!), have broadly the same legal system, and a predominantly ‘Anglo’ culture. Yes, the population is smaller (25 million compared to 67 million here) and far more widely spread.
But many of the key demographic trends are similar, with an ageing population, a large boomer cohort and rapidly rising death rates. And levels of affluence are also close, albeit the Australian economy has outperformed most of the developed world – including the UK – in recent years.
But on closer inspection, we uncovered some inherent differences, which proved vital to our analysis. So, what did we learn?
The UK legacy market is predicted to increase by nearly £600 million by 2024 following the latest Brexit decision.
According to the leading analysts of legacy fundraising, Legacy Foresight has confirmed that we will see a significant rise for legacy incomes in the next five years, even though there was a 2% drop in income in 2018. The findings are based on the recent decision to extend the Brexit deadline to 31st January 2020 and to hold a general election on 12th December 2019.
Legacy Foresight are forecasting that UK charity bequeaths in Wills are projected to grow from £3.2 billion in 2019 to £3.8 billion in 2024. Growth rates over the five years will average 3.3% per year – similar to those seen in the aftermath of the Brexit referendum in June 2016, but slower than the pre-referendum period, when annual growth was 4.1% per year.
The analysts expect 2020 to remain relatively subdued with annual income growth of around 2%. However, the period 2021-2024 is expected to see stronger growth in key economic variables, combined with an underlying rise in the number of deaths, to generate legacy income growth of nearly 4% per annum.
Today, legacy and in-memory giving are worth £5 billion to UK charities. That’s a tenth of all charity income – something to make fundraising directors and Chief Executives take notice. And over the next twenty-five years, the value of legacy and in-memory donations will double in real terms, reaching £10 billion by 2045. There are several reasons why we expect them to grow; rising deaths, the wealthy baby boomer generation, increased openness to making a gift and the cumulative efforts of British fundraisers to raise awareness and inspire action!
The donor landscape will change
People leaving or giving money in 2045 will have fundamentally different life experiences, attitudes and expectations to the donors we currently deal with. Not least, they will be ethnically diverse and multi-faith. 11% of Brits born in the 1960s come from an Asian, black, mixed or other ethnic backgrounds. 7% of them belong to a non-Christian faith group. Understanding and respecting the beliefs, traditions and motivations of all our legacy and in-memory donors will be even more important.
Further to this, a new generation of child-free women (now in their fifties) represents a significant future window of opportunity for legacy fundraisers. Educated, generous and feisty, they will become an increasingly powerful force in legacy giving.
It’s my digital life
Virtual reality and other digital innovations will bring the supporter experience to life; giving them behind the scenes glimpses of the organisation and its work, and envisaging the transformation their future gift will bring. International development charities are already embracing this technology, directly connecting donors and beneficiaries around the globe to great effect. All causes should now be thinking about the stories they can tell, and the assets they can showcase in digital form; to build trust, inspire gifts and demonstrate impact.