Have you built charity and philanthropy into your estate plan?

With the winter holidays fast approaching, many media campaigns are asking us to remember the less fortunate in our communities and beyond, and to donate generously to help support them.

While you may think the terms “charity” and “philanthropy” mean the same thing, they are not in fact interchangeable. Both involve donating money or time. However, charity is often a donation to cover a short-term need (for example, following a natural disaster), whereas philanthropy is associated with a different mindset, striving to solve the root cause of a problem rather than providing short-term solutions.

Regardless of whether you are charitable or philanthropic, donations are needed year-round—not just during the holiday season—and one way to make sure your generosity has a lasting impact is to build it into your estate plan. Here are three strategies to accomplish this, depending on your goals:

• Donate directly to a charity by setting out the gift in your will or designating your chosen charity as a beneficiary of your life insurance policy or (where permitted) your Tax-Free Savings Account, Registered Retirement Savings Plan or Registered Retirement Income Fund. If you wish, you can specify that the charity should use the donation for a particular purpose, such as funding a scholarship. 
• Donate through a donor advised fund (DAF) established with a public charitable foundation. You can make gifts to the DAF during your lifetime and in your will. The DAF then directs the funds to the charities you want to support.
• Donate through a private foundation established in accordance with your philanthropic vision. As with a DAF, you can make gifts to a private foundation during your lifetime and in your will. The private foundation then uses the funds in accordance with its objectives.

There is no one-size-fits-all approach, so the strategy that’s right for you may not be appropriate for someone else. That’s why you should seek legal and tax advice when incorporating charitable or philanthropic giving into your estate plan.

Stay tuned—a blog later this month will dive more deeply into donating directly to a charity on death.

 

About the Author

Valerie Markidis

As a Wealth Planning Consultant with CI Assante Private Client's Wealth Planning Group, Valerie works closely with our team to provide solutions for our clients in the intergenerational transfer of wealth, with a focus on estate planning. Valerie joined CI Assante in 2022, bringing 14 years of experience at two major trust companies, where she held national responsibility for Wills and actively supported advisors across Canada with questions and interpretations related to Wills, Powers of Attorney and Trusts.

Prior to her tenure with the trust companies, Valerie worked in private practice, where wills and estates were some of her key focus areas. She is lawyer with a Bachelor of Law degree from Osgoode Hall Law School and an Honours BA from Queen’s University.