Teachings of Ebenezer Scrooge: Helping those in Need (A Checklist for Charitable Giving in Your Will)

As Christmas draws near, our thoughts often turn to charitable giving, not unlike the enlightenment of Ebenezer Scrooge in Charles Dickens’ A Christmas Carol.  Perhaps your mind also wanders to the Ghost of Christmas Yet to Come, and you are inspired to include gifts to charity in your Will.  Careful estate planning will ensure your charitable gifts are (tax-efficiently) made to the right charity, in the right amount or using the right assets, and that the purpose of those gifts reflects your intentions.

1. Identify the Charity. If you wish to make a gift to a charity in your Will, it is critical to correctly identify the recipient charity. For example, a Canada Revenue Agency (“CRA”) Charities Listings search will show 46 listings for registered charities in British Columbia with the words “food” and “bank” in the name.  A little research might be needed as a charity may have a familiar name (for example, the Food Bank) that is not quite the same as its registered charity name (Greater Vancouver Food Bank Society).  To help reduce confusion later, include the full address for the charity and its charitable registration number.

2. Identify the Property to Donate. In Wills, we most often see gifts of cash to charity, but you can donate other types of property too, including securities, non-cash property (real estate or artworks, for example) and customer loyalty or reward points (such as AIR MILES or Aeroplan). A charity can also be a designated beneficiary of your life insurance or RRSP/RRIF proceeds.

3. Identify the Purpose. This is optional, but if you feel strongly about how the charity will use the gift, this must be clearly set out. We recommend that you consider what happens if the purpose you support is no longer practical from the charity’s perspective, and be wary of including restrictive terms that might not be permitted by the charity’s bylaws or supportable on moral grounds.

4. Identify the Tax Consequences. Charitable donations are generally treated favourably by the CRA, producing charitable donation tax receipts to reduce the tax owing by your estate following your death. In order for your estate to get a usable charitable donation tax receipt, the named charity must be able to issue an official donation receipt and the gift must be made in a determined amount or specified value.  The amount and the  type of property gifted also affect the tax impact to your estate.  You should seek legal and tax advice on how to best structure your estate to optimally benefit your chosen charity.

5. Avoid Double Gifting (Unless Intentional). If you and your spouse support the same charity, and you include the same gift to charity in both your Wills expecting that the gift will be made only when the last of you dies, if you die together there is a risk that the gift could be made twice, once from each of your estates.

As this only scratches the surface of making a gift to charity in your Will, we recommend that you work with a lawyer to ensure that your wishes are accurately documented.  Any member of our Wills, Estates + Trusts practice group would be pleased to answer your questions and to work with you to develop a suitable estate plan of which even Scrooge would approve: “I will honour Christmas in my heart and try to keep it all the year.”