Legacy Giving

“I have some money I want to give to my favourite charity. How do I do it?” is a question donors often ask me.

Well, besides making donations to your charity, there are many easy ways to make a Legacy gift that can profoundly support the causes you love well into the future. Let me give you some examples:

A Planned or Legacy Gift is really a gift of any size to a charity that has an element of planning involved in accomplishing the act of giving. These gifts are not as simple as signing a cheque or handing over cash, however, they are not as complicated as one may think.

The three easiest planned gifts to a charity are a bequest, a gift of life insurance and a gift of stock/securities.

A bequest (a gift in a will) is the most common planned gift, sometimes referred to as a Legacy Gift. Leaving a bequest to your favourite charity will ensure that a cause that was important to you in your life will continue to prosper after your death.

There are a few different ways to donate a portion of your estate. One is to designate a specific amount to the charity and the other is to leave a percentage of your estate.

One of the first things to do when making the decision to leave a bequest to a charity is to call them and ask for information. Any estate planning you discuss with a charity is confidential and you are under no financial obligation, however, you do want to be sure you have their correct name and specific will wording for your lawyer or legal representative. Also, remember a bequest is for anyone, regardless of finances, and any charity would be honoured to be a part of your legacy plans.

Life insurance is also a great way to help your favourite charity. A gift of life insurance can be done in a variety of ways, you can:

Designate a charity as the beneficiary of the policy: This is the most straightforward approach where you buy a life insurance policy and you designate the charity as the beneficiary. In this instance, you would maintain control of the policy, pay the premiums and the charity collects the insurance proceeds upon your death. The donation then qualifies as a tax credit on your final income tax return.

Name your estate as the beneficiary: This is similar to the first scenario in that you are the owner of the policy, however, instead of naming the charity as the beneficiary, you name your estate as beneficiary and simply leave instructions in your will that the proceeds of the life insurance policy be paid to your choice of charities. Again, the death benefit would qualify as a donation, giving your estate a tax credit on the final income tax return. Note that the proceeds would not be protected from probate fees, as the death benefit becomes part of the estate.

Transfer ownership of the policy to the charity and reap the highest tax benefit: In this example, a life insurance contract is set up so that the charity is the owner of the life insurance policy, and any annual premiums you pay will qualify for a tax credit. However, the future death benefit will not qualify for a tax credit. Note that since the charity would own the policy, you will no longer be able to make changes to that policy.

A gift of stock/securities is a surprisingly easy planned gift and is typically done while the donor is living. A gift of this nature is as simple as contacting your financial advisor or stock broker and asking them to initiate a transfer to your favourite charity. You or your advisor can contact the charity for their account information and sometimes a transfer form (depending on the charity) and there you are. Not only does the charity benefit from your donation, but you will not have to pay any capital gains on the securities.

Always talk to your financial advisor, your lawyer and your family when making decisions regarding your estate planning.

Amber Adams is the Director of Donor Relations for the Nanaimo & District Hospital Foundation. She has been helping Central Island residents fulfill their philanthropic goals since 2005.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: