Bequests
What is a Charitable Bequest?
When planning for the future, many people think about how they can make a meaningful impact even after they’re gone. Incorporating a charitable bequest in your will is one way to achieve this goal. It offers you the opportunity to extend your generosity, ensuring the causes you care about continue to thrive beyond your lifetime.
This blog explores what charitable bequests are, the benefits they can provide, and how organizations like Link Charity Canada can simplify the process of integrating philanthropy into your estate planning.
Understanding Charitable Bequests
A charitable bequest is a gift specified in your will or estate plan that directs some portion of your estate to a specific charity or charitable cause. These gifts can take on various forms, which makes them versatile and accessible to donors from all walks of life. Types of charitable bequests:
Specific Bequests
These indicate a particular dollar amount or a specific item to be donated. For example, you might leave $10,000 or a piece of artwork to a favoured charity.
Percentage Bequests
This specifies a percentage of your total estate to be gifted. For instance, you might decide to allocate 10% of your estate to a nonprofit organization.
Residual Bequests
These bequests involve donating the remainder of your estate after other beneficiaries have received their share. Residual bequests ensure your intended heirs are prioritized, while still leaving a gift for charity.
Contingent Bequests
A contingent bequest only takes effect under specific conditions. For instance, you might name a charity as a beneficiary if your primary beneficiary passes away before you.
Gifts of Securities or Assets
Charitable bequests aren’t limited to cash. You can donate stocks, bonds, real estate, or even shares in a business, providing financial benefits for both you and the beneficiary.
The Benefits of Charitable Bequests
Support the Causes You Care About:
A charitable bequest is one of the most powerful ways to reflect your values. Whether you’re passionate about education, healthcare, environmental protection, or religious missions, your bequest ensures these causes receive the support they need.
Create a Lasting Legacy:
Donations to charity through your estate extend your generosity far into the future. This legacy demonstrates a commitment to making the world a better place, inspiring your loved ones and community.
Tax Advantages:
There are practical perks to adding philanthropy to your estate plan. Gifts made to registered charities typically qualify for tax exemptions that can reduce the taxable value of your estate, resulting in more savings for other beneficiaries. Gifting publicly traded securities can also help you sidestep capital gains tax, maximizing the impact of your donation.
Flexibility:
Life circumstances evolve, and so can your charitable intentions. Bequests are easily adjusted through updates to your will, ensuring your legacy adapts to reflect your values and priorities over time.
Ease for Executors:
By clearly stating your charitable intentions in your will, you minimize administrative burdens and provide clear instructions for your executor. This reduces confusion and the potential for disputes.
Including charitable bequests in your estate plan offers personal and financial rewards, creating a win-win scenario that can leave an enduring legacy.
How Link Charity Canada Can Help
Managing an estate and including charitable bequests can feel overwhelming. That’s where organizations like Link Charity Canada come in. They streamline and simplify the process, helping donors maximize the value of their gifts and their impact on the causes they care about.
1
Donor-Advised Funds
One of Link Charity’s standout offerings is their donor-advised fund. This service consolidates your charitable giving, allowing you to direct all gifts through one account. It offers flexibility, ensuring that multiple charities can benefit from one plan, while also giving you the ability to amend your instructions without revisiting your will.
Here’s how it works:
- You make a single bequest to Link Charity Canada.
- Then, via a letter of direction, you specify how and where the funds should be distributed.
- You can revise your instructions at any time without needing costly legal amendments to your will.
2
Tax Benefits and Strategic Planning
Link Charity specializes in helping you maximize the tax advantages of your charitable giving. For example:
- Donating securities like stocks or bonds through your estate can eliminate the capital gains tax on appreciated value. Your estate receives a tax receipt for the full current value of the gift.
- Donations can offset estate taxes, leaving more of your estate to heirs and charities.
Their experienced advisors guide you through these options, ensuring you get the maximum tax benefits while effectively supporting your chosen causes.
3
Legacy and Estate Planning
The advisors at Link Charity understand how important it is to honour your wishes. They work closely with you to plan a charitable legacy that reflects your passions and leaves a meaningful impact. Whether you want to benefit local charities, religious institutions, or educational organizations, their expertise ensures your gifts are handled with care and respect for your intentions.
4
Anonymous Giving Options
If you prefer discretion, Link Charity allows for anonymous giving. This ensures that you can support meaningful causes while retaining your privacy.
Steps to Include a Charitable Bequest in Your Will
Including charitable giving as part of your estate plan doesn’t need to be complicated. Follow these steps to get started:
1. Reflect on Your Priorities
Think about the organizations and causes that have shaped your life. Consider how you’d like your legacy to support these entities.
2. Consult with Professionals
Meet with estate planners and tax advisors to understand the financial implications of your choices. They’ll help ensure that your intentions comply with legal and tax regulations.
3. Work with Link Charity Canada
Link Charity provides the tools and guidance needed to incorporate charitable bequests seamlessly into your estate plan. They’ll walk you through gifting options and help with tax-efficient strategies.
4. Draft or Update Your Will
Clearly outline your charitable intentions in your will. Be sure to include specific details about the charities, amounts, and conditions linked to your bequests.
5. Keep Your Plan Current
Revisit your estate plan regularly to ensure it aligns with your evolving circumstances and philanthropic goals.
Why make a Charitable Bequest to a
Donor-Advised Fund, like Link Charity?
Tax Benefits
There is an unlimited deduction of charitable bequests against the value of an estate, making it a powerful tool for reducing estate tax. Donating publicly traded securities through a will is a particularly beneficial strategy for receiving tax benefits. Simply select which securities to gift or give your executor authority to satisfy a bequest with a direct gift of securities. Your estate receives a tax receipt for the appreciated value of the gift—and HALF the tax on capital gains is waived.
Efficiency
Charitable bequests provide clear instructions on how to distribute certain assets according to your wishes. Making charitable bequests to a donor-advised fund can be more efficient than other types of charitable bequests because it can streamline the work for the estate executor.
Flexibility & Ease
Flexible and easy to update, charitable bequests can be written into a will, and if circumstances change you can revoke it just as easily in a subsequent will or codicil.
Leave a Legacy That Makes a Difference
A charitable bequest is more than a financial transaction—it’s a powerful statement of what you value most. By thoughtfully planning your giving, you can positively impact your community, inspire others, and leave behind a legacy that will be remembered and appreciated.
With the guidance of experts at Link Charity Canada, you can simplify the process and amplify the value of your gift. Whether you want to make a single bequest or establish a donor-advised fund, they offer a comprehensive range of solutions tailored to your goals.
