Talking about what will happen after we die can be uncomfortable – both for us and for our loved ones.
However, these conversations are critical. Talking to your beneficiaries may be one of the most important parts of managing your estate.
If you have included charities in your will, you may want to also include the following people into the conversation.
Family and loved ones
Family members can sometimes be surprised to learn that their loved one has named a charity in their will. Sometimes they had no idea their family member supported a particular charity – or in some cases, many charities!
No matter what your reason is for leaving a charitable gift in your will, talking about your wishes with your loved ones is important. Not only does it provide them with a better understanding of the decisions you have made, it also helps them to later honour these decisions and respect your choices.
Professional advisors: Financial advisors, accountants and lawyers
It’s not just important to talk to your family and loved ones about your philanthropy, it’s also important to talk to professional advisors.
Did you know that Canada has some of the best tax incentives for philanthropic giving in the world? While this may not be your main reason for giving, it really is important to understand how tax credits work. If you do, you can maximize the amount you can give, while minimizing your taxes.
For example, when you leave a gift in your will, the charitable contribution limit is higher upon your death. Since the 2016 changes, there is now a category of charitable gifts called “estate donations” – these include gifts by will, life insurance policies and RRSPs/RRIFs.
What’s more, initially estate donations can be claimed against up to 100% of net income in the final two years on one’s life, and against up to 75% of income over five years of estate returns.
What does this mean? In effect, with proper planning (and dependent on the province in which you reside) a taxpayer may eliminate taxes at death by giving instead to charity. In most cases, this will have little or no impact on their family or loved ones.
This is just one example of why it’s important to speak with professional advisors about your philanthropy. They can help you plan your giving in a way that benefits everybody involved: you, your loved ones and the charities or communities you care about.
If you have chosen to leave a gift to a charity in your will, please let them know!
Why tell them about your deferred gift?
First, you want to ensure the legal name of the charity is correct.
Second, you may also want to designate the proceeds to a certain program close to your heart. It may be many years before a charity receives your future gift. Their programs or areas of focus could change. Ask your charity how long they plan on offering a particular program, or what opportunities may be in development for the future.
Or, perhaps you’d prefer your gift be endowed. What are their endowment policies? How would you like to gift to be recognized?
Third, there may also be meaningful ways to see the impact of your generosity. For example, there may be opportunities for you to volunteer, provide mentorship or stay connected to your community. And what better way to do so than through the charity you already plan on supporting?
Lastly, but most importantly, a deferred gift is the ultimate act of philanthropy; you thought enough about the charity to leave us a gift in your will. To us, it’s like being part of the family. We really want to be able to thank you while you’re still living. We want you to continue feeling connected to our mission and impact in your community, even if retirement means that you can no longer give as much or at all on an annual basis.
Make local love your legacy
We’re so lucky to live in one of the best countries in the world. But the reality is that it’s not equal and it’s not perfect. Right here in the Lower Mainland and Fraser Valley, kids are vulnerable seniors are isolated, and many of us feel disconnected from each other.
Through charitable gift planning we can make our communities better for everyone.
We can show our local love through the legacy we choose to leave.
Learn more about making a planned gift to United Way of the Lower Mainland, here.
Seeking more tips for tough conversations? Here’s some helpful advice for talking to aging parents.