Did you know that you have more options than just leaving portions of your Estate to people? You may actually consider leaving a legacy to a named charity which, by legal requirement, will have one or more of the following charitable purposes: the advancement of religion, the advancement of education, relief of poverty or public benefit.
What are the benefits to gifting to charities by will? In some cases, it’s an opportunity for you to make a generous donation that you may not have been able to make while living. There would be tax reductions to your Estate in the year the gift is made as well as the preceding year. An Estate gift to a charity is revocable in the sense that a codicil or a subsequent Will can cancel it. You can provide such a gift simply by adding a paragraph to this effect in your Will. Finally, charitable giving is an especially attractive option to those creating a Will who do not have children or who have self-sufficient, adult children.
The disadvantages to estate gifting to charities are:
- the testator does not get to see the charity benefit from their gift;
- the charity, itself, does not benefit until after the death of the testator;
- from the perspective of the charity, the testator can always change his mind and revoke the gift; and
- the testator does not get tax benefits, as it is only their Estate that receives the tax reduction.
There are situations where the charity of choice is improperly named or described in the Will and this creates confusion for the trustee who is trying to carry out the testator’s wishes. Thus, if writing a will without the assistance of a lawyer, one should take extra care in naming the charity. Similarly, the lawyer drafting the Will would be wise to exercise due caution to ensure that the charity is correctly identified.
If the particular charity no longer exists at the time the testator dies, the court will attempt to discover the testator`s actual intention and substitute the gift by giving it to a similar charity with a comparable purpose or charitable objective.
One should also bear in mind that it is also possible to make a charitable donation by naming a charity as the beneficiary on a life insurance policy, RRSP or other testamentary document. Furthermore, a charitable donation cannot be made on your estate`s behalf if there is no such direction in your will or other testamentary document. To discuss making a charitable gift in the event of your death, please contact Andrea P. Kelly.
***
Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters. She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process. This is quite often enlightening for her clients and facilitates individually tailored services. If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.