A Lawyer’s Perspective: Advice on How to Leave a Gift in Your Will
By Jeffrey Norwig |
Jeffrey Norwig, a partner at the law firm McDougall Gauley, kindly sat down with Will Power to answer some frequently asked questions about leaving a gift to charity in your Will. The first thing he will tell you is that this can create a wonderful legacy to leave behind…if it is done properly. It is important to give the process some good thought to get it right.
Will Power: How do I decide how much to leave to charity in my Will, and still make sure there is enough left to take care of loved ones?
Jeffrey: Determining how much you leave to charity is a personal decision. There is no exact amount or formula to follow. Your decision will likely depend on several factors – the size of your estate, outstanding legal obligations or debts, the charities you want to support through your Will, and how much you want to leave to your loved ones. You might want to start with a percentage. For argument’s sake, let’s say your estate after legal obligations and debts was valued at $1 million. If you leave 1% of your residual estate to charity, that will translate to a gift of $10,000. That’s a sizable donation that would be very meaningful to any charity, and it would mean your loved ones still receive $990,000.
The other important question to consider is the legacy you want to leave behind, and what you want to accomplish with your gift. This may seem like a private matter, but is important to work closely with your charity, and your trusted advisors (like a financial planner, accountant, or lawyer) to properly plan for the gift. With the right estate plan in place, you can balance the needs of your loved ones with your charitable bequests.
Will Power: What steps do I need to take to add a charitable donation in my Will?
Jeffrey: Adding a charitable donation to your Will can be simple as having your legal advisor include a clause to your Will. However, there are a number of steps you will need to take beforehand to ensure the charitable gift through your estate is set up correctly. First, you will need to decide on the dollar amount of your gift or specific percentage of your estate, and whether you want to make your donation through cash, stocks or another type of asset. You also want to ensure that due diligence is carried out regarding the charity itself, like whether it’s registered with the Canada Revenue Agency if you want to receive tax credits for your donation. Wording in your Will should also specify the legal name of the charity and its charitable registration number, and if there any conditions on how you’ wish your gift to be used. Lastly, your Will should stipulate that other charities be chosen in the event that the current charity ceases to exist or is unable to carry out your wishes properly.
Will Power: What if I’ve already written my Will, how do I go back and add a charitable donation to my Will?
If you have already prepared your Will but want to include a charity, speak to your legal advisor about adding a new clause to your document. This can be a fairly simple process. If you have many changes to your Will, it may be easier to just prepare an entirely new one. This will make things easier for the administration of the estate administration since there is only one document instead of two or more.
Will Power: When I pass away, how will my donation make it to my charity of choice?
As part of your estate administration, the executor has an obligation to ensure your beneficiaries – including any charities named in your Will – receive their bequest. With proper planning at the outset, you can provide them with the details needed to get the gift to the charity. You will want to work with your charity in advance to lay out how you’d like your charitable bequest to be used, whether you’d like your family involved, and if they can accept the type of donation you’ve set up. Certain gifts such as property or shares may require more planning to get them into the charity’s hands than a straight forward cash bequest. This conversation should also include your advisors.