Many of us have causes we may donate to throughout our lifetime to help charities with funding their mission. Legacy giving, however, is a little different. Donations usually are the answer to the question: “how can I help today?”. Legacy gifts are the answer to: “how can I help tomorrow?” and “how would I like to be remembered?”.
Willful surveyed Canadians and found that only 12% of Canadians plan to leave a legacy gift, and a third of Canadians haven’t thought about it yet or are undecided. This means there is a big opportunity to educate Canadians about the power of legacy gifts.
What is a legacy gift?
A legacy gift is a gift to a charity or non-profit organization in your will. It can be a piece of property, cash, or a percentage of your estate. Legacy gifts play a key role in supporting charitable organizations, yet many people don’t know that they’re an option, how they are paid out, or the tax benefits of these gifts.
To learn more about legacy giving, watch our video with Paul Nazareth, Vice President, Education and Development for the Canadian Association of Gift Planners.
How do I leave a legacy gift?
Charitable bequests, also known as legacy gifts, can be given in two ways. First, you can leave a lump-sum cash amount to an organization of your choice. These gifts are given separately when you pass away, and are not included in your residual estate (everything that’s left after debts/taxes are paid and specific gifts are distributed).
Instead of or in addition to leaving a set amount, you may leave a percentage of your residual (remaining) estate to a charity. The organization will receive the cash value of the distribution you gave them from your overall estate. While a cash gift will remain constant over time, a percentage of your residual estate can grow over time, resulting in a higher potential gift to the charity of your choice.
Leaving a legacy gift is really quite simple. When you make your will with Willful, leaving a legacy gift involves just a few clicks. After the “Specific Gifts” section where you can assign property and lump sum cash gifts to your loved ones, you will see our charitable giving section that allows you to leave a lump sum to charities of your choice.
If you prefer to leave a percentage of your residual estate to a cause, you can add the organization as a beneficiary in the next section.
If you don’t see your charity in our dropdown list, please click the link to Canada Helps to find your organization and their CRA number.
You can come back at any time to make changes to your legacy gift, whether it’s adding more organizations, changing the type of gift (dollar amount vs. percentage) or changing the gift value. Just log back in to your Willful account, make the changes and follow the attached instructions to sign and witness your will to make it legally valid. It’s important to us that we not only educate Canadians on the power of legacy giving, but also make it as easy as possible to do.
What are the benefits of leaving a legacy gift?
People often worry that leaving a legacy gift means that there will be less to give to their loved ones. The truth is, you can make a legacy gift without taking away from the gifts left to your family and friends. The Canadian government has created valuable tax incentives to encourage Canadians to leave legacy gifts. When you leave a legacy gift, your estate receives a tax credit for the full value of the gift, which adds a tax credit to your final income tax return. This can help to maximize the value of your residual estate for your beneficiaries.
Aside from tax incentives, there are many other reasons to leave a legacy gift. Legacy giving is a way to leave a lasting legacy of generosity and make a cause you care about an important part of your life story. Your gift might also cause others to think about their own philanthropic goals and inspire them to give back as well. In terms of how your legacy gift benefits your charity of choice, they are often unexpected. Willful CEO Erin Bury is on the board at Save the Children Canada, and she’s seen firsthand how legacy gifts can help organizations achieve their goals.
While legacy giving makes it possible to leave much larger gifts than otherwise possible, it’s important to remember that you don’t have to be wealthy to leave a legacy gift. You can leave as much or as little as you want - there is no gift too small to make an impact. It only takes a few minutes to leave a gift to charity but it creates a legacy that lives on forever.