In my estate planning practice, I meet people every day who have been meaning to make or update their Will for quite a long time. When I ask what the barriers have been to getting such an important task done, my clients most often tell me that they have struggled to decide on a fair distribution for their estate after they die. While this article will not necessary help you solve that dilemma fully, my hope is that I can provide some guidance and at least convince you to include charitable giving in your estate plan.
You are likely aware that there are tax advantages for making charitable gifts, both during your lifetime and in your Will. It may be possible to leave more money to your loved ones and friends if a large tax liability is offset with a well-planned charitable deduction. However, the sense of pride of being able to support a meaningful cause is perhaps more valuable than any financial benefits your estate may receive.
If you do not already know which charities you want to support, think about the causes that have had a meaningful impact on your life. Consider organizations that support healthcare, animals, the arts, nature, education or those less fortunate — all are worthy and in need of your support. Your gift is a reflection of your values. As you are reading this article through the Regional Animal Protection Society, you are likely an animal lover. May I suggest that you consider including a gift to the Regional Animal Protection Society in your Will to help to ensure that the lives of even more animals are saved and improved?
Whether or not you already support charitable organizations like the Regional Animal Protection Society, you likely wish that you were able to be more generous. A gift in your Will does not reduce current income, so it will have no effect on your cash flow today. No matter your financial circumstances, you can make a significant impact by making a charitable gift in your estate plan – you can't take the money with you, after all!
There are many ways to include charitable giving in your estate plan. The most common gift is a legacy (cash gift) in your Will. You can give a fixed amount of money, an asset such as artwork, or a percentage of your estate – several of my clients have decided to leave the entirety of their estates to charity. If your Will has to be probated in BC, a probate fee of 1.4% of the fair market value of your estate will be owed to the Province, and it could take a year or more for the charity to receive your generous gift.
You can also designate a charity as a beneficiary of registered accounts (TFSAs, RRSPs, RRIFs) and life insurance policies [you can also designate a charity as a beneficiary of only a portion of these assets, if you wanted more than one beneficiary to benefit as well]. Doing so bypasses the need for probate on that asset, avoids the 1.4% probate fee on that asset, and allows the charity to receive your gift faster – often in a matter of weeks. Speak to your lawyer and other professional advisors before making such a designation to maximize the tax benefits and impact of your gift (but also to understand the tax consequences in the case of RRSPs/RRIFs).
Although not required, many charities would like to know in advance if you are leaving a gift in your Will to their organization: this allows the charity to speak with you to learn about your motivations for your financial support. If you decide to leave a gift to the Regional Animal Protection Society in your Will, I encourage you to get in contact with the team to discuss your hopes for how your generous gift will be used.
Be sure to also discuss your decision to make a charitable gift with your family, and why the chosen organization is meaningful to you. I believe your family will be proud of your gift once it's made and its impact is felt, and they may even be inspired by your generosity!
Creating or updating your estate plan can feel like a daunting task, but I am happy to report that most people report a sense of relief once it is finally done. If you have recently made a mental note to make or change your Will, let this be the push you need to put your thoughts into action. Be sure to amplify those good feelings with a generous gift to a worthy cause like a gift to the Regional Animal Protection Society.
Originally Published by Regional Animal Protection Society
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.