The first step in gifting to charity from your Will or estate is to decide what legacy you want to leave behind. “Is there a particular cause that was close to your heart? What do you want to be remembered for?” says Craig Hikida, vice-president, donor services, Vancouver Foundation.

“It can be helpful to consider your personal values and imagine the type of support you want your future family, neighbours and community to have access to,” says Maria Howard, CEO of Family Services of Greater Vancouver. “Today, that might be services like free counselling and literacy and life skills workshops, but those community needs will always evolve. By supporting a charity with a proven track record of meeting community needs, you’ll also know that your legacy will support people in the ways that matter most for generations to come.”

Why Legacy?

Giving to charity as part of one’s estate has important benefits beyond the philanthropic. Legacy gifts are eligible for a tax-receipt for 100% of the gift value, with some types of gifts providing tax benefits now, and some to your estate.

“People often choose to engage charitable gift strategies to make their donations tax efficient and as part of a long-term philanthropic plan,” says Danielle Sleiman, vice-president, development, at Burnaby Hospital Foundation.

Because legacy gifts can be of various sizes and invested to fulfill or contribute to a long-term giving strategy, they can be the backbone of an organization when they are used to fund operations or specific, ongoing programs.

“Choosing to support the operations of a charity means it can continue to hire the people behind the scenes and keep up to date with infrastructure, facilities, IT and cybersecurity—elements of running a business today that are critical to success,” Howard says.

One step at a time

Hilary Beard, director, gift & estate planning, for BC Children’s Hospital Foundation (BCCHF) says BCCHF recommends a seven-step approach to legacy planning that involves prioritizing why a Will is essential, committing to a simple plan, determining all assets and liabilities and their value, choosing an executor—and choosing wisely, deciding on beneficiaries, agreeing on guardians for children and finally, meeting with professional advisors to make sure all the details are in order.

“Once you understand what a Will covers and does not, and why it is vital to have one, turn to a lawyer or notary to craft your Will,” she adds.  “Without a Will, a donor’s assets will be distributed according to law and that may not be what they want. And if that Will is decades old or family situations have changed, it should be updated.”

It is important to have an integrated estate plan and, when possible, complete this work while an individual is in good health, so thoughtful decisions are made. “Some of the steps that can be included are taking an inventory of all financial assets, writing or updating your Will and creating an incapacity plan,” Sleiman says.

Take the road less travelled

There are many ways to give a legacy gift, some more common than others. “On top of bequests (cash gifts), there are lesser-known ways to give like TFSA, RRSP, life insurance, endowments, charitable remainder trusts, securities and even real estate and art pieces,” Howard says. “A professional can help you navigate what will make the most sense for your unique situation.”

Sleiman suggests considering donating securities, appreciated stocks, mutual funds or stock options because in most cases this means the donor won’t pay tax on the capital gains.

“Forming an endowment allows you to be more specific on the use of your gift,” she adds. “You can also establish a bequest in your Will with either an outright or a residual gift.”

Life insurance is an option where one may choose to make the charity the registered owner of the policy or the beneficiary. If the charity is able to accept the life insurance policy, premiums paid are eligible for charitable tax receipts. Engage with your charity first before initiating steps to transfer ownership of your policy. Benefits are similar to registered financial accounts, and in addition, life insurance allows for your other beneficiaries to receive all of your estate.

In fact, any gift left in a Will, as well as registered financial accounts, can name a direct beneficiary, and this ensures the recipient receives the gift more quickly than if a beneficiary is not named or if a person does not have a Will.

“If you do not name a beneficiary, the funds are paid to your estate where they will be subject to probate and executor fees,” Hikida says. “It’s important to note that there can be tax consequences for your estate in naming a beneficiary, and you should discuss this with your tax advisor.”

Charitable gift annuities offer a guaranteed income for life with minimal or no taxes on income paid out. Individuals aged 70 and over benefit most from this type of giving, as they can combine financial security with tax benefits.

“When allocating your estate, we suggest using percentages so each beneficiary share rises or falls with the value of your final estate, and you avoid worrying about specific sums that may not be the proportions you want at a future time,” Beard says.

The tax advantage

It is important to consider the tax implications of providing a legacy during your lifetime or in your estate, after you pass.  Both have advantages.

Additional giving options that involve more complex planning include the use of alter-ego trusts, family trusts, estate freezes, employee stock options, private company shares, the gift of real estate (a cabin property or residential home) and the use of the capital dividend account.

“These options provide the opportunity for a reduction in taxes, security of income and capital in lifetime, ability to transition wealth and decision-making in a cohesive manner, and provide meaningful charitable legacies to beloved charities,” Beard says. “Lastly, and without price, they may help maintain peace within one’s family.”

Check in with the Charity

Once you have mapped out your plan, be sure to consult with experienced professionals such as your financial planner and estate lawyer. It is also important to discuss the gift with the charity, even if the exact terms of the gift are not yet decided. “Not only will the charity want to thank you, but this is an important step to ensure that they can actually carry out your wishes,” Hikida says. “There can often be confusion about what exactly a charity does or how to name it in your will, but the charity often has suggested wording to review with a lawyer.”

Preserving your legacy

Once you have signed your final Will and have copies of the institution’s forms signed for your designated registered financial assets, it is important to store the documents carefully.

“An original Will should be stored in a secure location and a copy shared with the executor and/or registered with the BC government’s Will Registry to ensure the executor knows where to find the document,” Beard says. “Ensure the secure location of your original copy is known to your executor.”

When choosing an executor, consider a younger, trusted loved one who is organized and capable with finances, and does not have any financial woes of their own.

Get support

Charities often have dedicated legacy giving support teams, a network of trusted and experienced estate lawyers, financial planners and other professionals, and some even have partnerships with agencies that can help donors set up their wills.

“The fundraising team at Family Services of Greater Vancouver is available to talk to donors at any point in their decision-making process,” Howard says. “If you’d like to learn more about FSGV’s current work or future plans, please reach out at giving@fsgv.ca.”

Burnaby Hospital Foundation supports people in the process of preparing their estate plans by providing educational materials and one-on-one planning meetings. They also provide connection to community lawyers, notaries, accountants and financial advisors. “Membership to the exclusive Legacy Society is also available to those who have decided to leave a legacy gift to Burnaby Hospital Foundation. To learn more, go to bhfoundation.ca/legacy.

BC Children’s Hospital Foundation has helped donors explore their options through diverse experiences in accepting many types of gifts. The Gift & Estate Planning Team shares tips and has insight on some pitfalls to avoid, and helpful guides to cover options, questions and ‘how to’ steps. “Importantly, we are available to collaborate with your advisors to ensure your wishes become a reality,” Beard says. “Please feel free to contact a member of the Gift & Estate Planning Team at legacy@bcchf.ca.”

Vancouver Foundation has flexible planning options to help donors create their own named charitable fund, including the ability to update which charities or causes will be supported without having to write a new Will. “This can make the administration of your estate easier for your executor, as well,” Hikida says. “Our experienced donor services team can guide you through every step of legacy giving. Visit vancouverfoundation.ca to start making a lasting impact.”

Reach out to the charity of your choice to start building the future and your legacy today.