This month marks the beginning of the WillPower.ca Campaign, led by the CAGP Foundation and the Canadian Association of Gift Planners. WillPower.ca Campaign is designed to show Canadians the power they have to make a difference with their Wills by leaving charitable gifts.
Since 2019 and the start of the Pandemic Canadians donated in huge numbers to help during the COVID-19 pandemic. For example, they donated $5.1 million to approximately 630 charities responding to the crisis (through CanadaHelps’ Healthcare and Hospital Fund and Community Care Fund). We also know that many charities and not-for-profits struggled throughout this uncertain time.
Many Canadians feel that if they leave a charitable gift in their Will, it will take away from gifts and support for their loved ones, who they also wish to benefit as part of their Estate plan. But according to CAGP and the CAGP Foundation, leaving even 1% of one’s estate to charity can still “have an enormous impact on your cause, while still leaving 99% of your estate to your family…You don’t have to choose between your loved ones and the causes you care about when planning your Will.” The Will Power website has a helpful legacy calculator, which can help with visualizing what it means to leave a gift to a charity and still be in a position to benefit your loved ones.
Some people may think that they need to have a very large Estate to be able to make a meaningful gift to charity. But regardless of the size of the gift, it can still make a difference. Will Power estimates that if only 3.5% more ordinary Canadians included a gift in their Will in the coming decade, the result would be $40 billion in gifts to charitable causes.
5 Common Myths Associated that Get in the Way of Your Will Power
1. I can’t support both loved ones and my favourite causes.
Most people choose to leave everything they have to their family and loved ones. On the surface, it makes sense. However, a careful calculation can demonstrate that a small percentage of your estate left to charity still leaves enough for you to support your loved ones. You can see for yourself using our Legacy Calculator.
Also, the reality is that your Estate will be taxed, perhaps more than you realize. Choosing to support charities that you care about can reduce, and in some cases, even eliminate the taxes to be paid. A financial advisor can help make sense of this for your particular situation.
2. I need to be wealthy with a big estate to make a gift to charity in my Will.
The majority of charitable gifts in Wills are left by Canadians of average means. You may be surprised to find that when all of your assets are realized, you too will have a tidy sum for the support of both loved ones and your favourite causes.
We estimate that if only 3.5% more ordinary Canadians included a gift in their Will in the coming decade, this would result in $40 billion dollars being directed to charitable causes. No matter the size of your estate, you can be a part of this impressive movement for change.
3. Leaving a gift in a Will is complicated.
Leaving a gift to charity in your Estate can be as easy as adding a clause to your Will. Notify your lawyer, or notary if you live in Quebec, and they can take care of adding it in. In fact, there is an online intention form here that will get the process started quickly.
We encourage you to involve your loved ones in your decision. Make the process about celebrating who you are, the values you hold, and the life you lead.
4. I’ve already written my Will and there is no going back.
The truth is you can amend your Will at any time. Adding a gift is as simple as letting your intentions be known to those who drafted your documents in the first place. It is also important to keep a Will and POAs up to date, we recommend every 3-5 years that you do a review.
5. I will never see the impact of the gift I make in my Will.
It can be discouraging to think that you will not be around to see the impact of the gift you leave in your Will. We understand that you would rather do what you can now. Absolutely. However, you and many other Canadians will never be able to make as big a gift while you are alive as you can through your Will (when the value of your Estate is realized). So, here are three ways you can see the impact your future gift will have — before you are gone.
- Many donors give smaller gifts to the causes they love when they’re alive. They become engaged with the charity or cause, so they get a feel for what the impact of their future gift will be.
- Many charities have established legacy societies to help donors get a sense of the impact their future gift will have. By letting charities know that you’ve included a gift to them in your Will, you’ll become a part of these groups that will show you the difference you will be making after you’re gone.
- Finally, a gift in a Will can help your family feel part of the impact you are making, as many charities involve the family in the implementation of the gift. Knowing your loved ones will remain connected with you through your contribution after you’re gone can be a very comforting experience.
Another aspect of charitable giving to consider is the tax benefit of doing so. Depending on the nature of your assets at the time of your passing, and any Estate planning steps, there could be significant taxes payable on death. Making a testamentary gift to a cause that is important to you could result in a reduction of the amount of taxes to be paid. To learn more about how Canadians are sharing download the Giving Report for 2021.
Read about some reasons children get cut out of Wills
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.