Leaving a Gift in Your Will: Lose the Jargon and Plan in Plain Language
By Will Power
Leaving a gift in your Will doesn’t have to be complicated. Unfortunately some of the language can be. In order to help you simplify the process, we have translated some of the technical terms you’ll face into plain language.
The person or organization you chose to give something to in your Will. There can be one or many.
This is the gift that you leave to a person or organization in your Will.
Capital Gains on Securities
A capital gain is the difference between the price paid for a stock or share, and the sale price achieved. In Canada, capital gains are taxed at a rate of 50 percent. Capital gains are eliminated when a publicly-traded security is transferred to a charity. It is recommended that you get advice from a professional advisor on how this could work for you.
Donor Advised Fund
Think of a Donor Advised Fund (DAF) as a ‘mini foundation’. You can set up a fund that is invested for a period of time. The returns, and even capital, can then be used to make grants to your charities of choice. There are a number of organizations where you can set up a DAF, such as community foundations, public foundations and financial institutions.
Add up all of your possessions, property, and money. Now deduct any debt or liabilities. There you have it – your estate!
Executor, or Liquidator in Quebec
This is the person (there can be more than one) you appoint to make sure your final wishes are carried out. You can choose a family member, friend, or a professional. It’s up to you.
This is the person you name in your Will to be responsible for your dependants including children and/or pets. You better ask first!
This describes someone who has died without a Will. You definitely don’t want to be this person!
To put it simply, a legacy is a gift left in your Will, but it can also be much more than that. Your legacy is what you leave behind, something that summarizes what your life meant and the impact you’ve had on the world.
Life Insurance ‘Death Benefit’
This is the amount that is paid out by your life insurance policy when you pass.
Power of Attorney, and Protection Mandate in Quebec
A power of attorney is a legal document that you sign to give someone you trust the authority to manage your money and property (Power of Attorney for property), and your personal affairs if you are unable (Power of Attorney for personal care). Importantly, they cannot draft your Will or make changes to your Will. This is entirely up to you.
Please note: In Quebec the Power of Attorney for personal care is called a Protection Mandate.
In Canada we don’t have estate taxes, most provinces have probate taxes. The probate taxes vary from province to province, and are based on the total assets of the estate. Taxtips.ca has a great resource on this topic.
Note: In Quebec there is no probate tax on a notarial Will, instead there are court filing fees.
A Will drawn up by a notary in Quebec. Once signed, your Will is registered by your notary in the Register of Wills and mandates.
Leaving gifts in your Will is a powerful act – something you don’t want to simply gloss over. We encourage you to be smart about it. Remember, you can take care of your loved ones and create change in the world, if you take a little time to plan your estate with sound advice from a professional.