Charitable giving and estate planning

April 11, 2017 Tanis Jalbert, LL.B., Wealth Specialist

I often get questions about charitable giving in the context of estate planning. These questions arise for a number of reasons. Sometimes clients are drawn to give to a particular charity based on a personal experience such as receiving treatment at a hospital or benefitting from a charity themselves. Other times, clients wish to create a lasting legacy by establishing a bursary or scholarship in their family name.

Tax advantages to charitable giving

Then there are the tax advantages that may be the motivating factor for clients who are perhaps selling a business and wanting to reduce their tax bill. Whatever the reason, there are a number of options available to clients that can be tailored to achieve their objectives and wishes.

From an estate planning perspective, there are a few basic ways to donate to a charity. You can leave a gift in your Will to the charity. The gift can be a specific item (for example, a collectible item), a lump sum amount or a percentage of your net estate.

Other ways to donate to charities

Another option is to set up a charitable remainder trust which allows you to leave your net estate for the benefit of family members during their lifetime and then on their death, the balance is paid to a charity.

Particularly when tax planning is a consideration, the charity can also be named as beneficiary of a RSP, RIF or life insurance policy.

When questions about charitable giving arise, and for larger charitable giving opportunities I regularly refer to the guidance put together by ATB Wealth in our Giving Back brochure . This chart is an excellent summary of some of the common options and considerations that come into play when including charitable giving in your estate plan.

Questions to consider

If charitable giving is of interest to you, I would suggest you start by giving thought to your wishes regardless of how much you want to give.

  • Are you considering donating in your life and/or on death?
  • Are you planning to make a one time donation or ongoing donations?
  • Do you want your family to continue your legacy?
  • Is there one charity you would like to benefit or multiple causes?

With your charitable intentions in mind, the next step is to talk to your accountant to determine the most tax efficient way to achieve your charitable wishes, and your lawyer as to how to structure the charitable giving in your lifetime and/or on death.

This article was originally published in Navigate, Volume 8.​​​​

 

 

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