Leaving a Gift in Your Will: Lose the Jargon and Plan in Plain English
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 English.
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’. Donors can set up a fund with a gift to a public foundation that is invested for a period of time. The returns, and even capital, can then be used to make grants to charity. 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!
An estate advisor is a financial advisor, accountant, or lawyer who can help you plan your future estate. They will advise you on how to transfer assets to heirs in a tax efficient way.
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!
In its narrowest sense, legacy is just another word for a gift left in your Will. However, it can be so 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
A power of attorney is a legal document that you sign to give one person the authority to manage your money and property, and another person to manage your personal affairs, if you are unable. Importantly, they cannot draft your Will or make changes to your Will. This is entirely up to you.
In Canada we don’t have estate taxes, we have probate taxes. They vary from province to province and are based on the total assets of the estate. Taxtips.ca has a great resource on this topic.
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.