How do I leave a gift to a charity in my will?

It’s wonderful that you have a desire to put your money towards causes that are important to you. The amount you give to charity is a personal decision. As you mention, there are likely other things you want the money you leave behind to accomplish. Consider the size of your estate, any debts you may leave behind, and the specific needs of your family. 

Touching base with the charity

If the gift will be significant, you’ll probably want to loop the charity in on your planning. Get on the same page about how you would want the donation to be used. Do they have specific initiatives or projects that align with your intentions? Some charities prefer the gift to be to their foundation, if one exists. As well, if you’re planning to give something other than money, check to see if they can accept it. For example, you may want to leave a plot of land, but its location might not make sense for their operations.

Preparing your will

Adding a charity as a beneficiary in your will is straightforward. Here are some things you’ll want to consider:

• Check whether the charity is properly registered with the Canada Revenue Agency. If it’s not, the estate won’t get any tax credits for the donation. This leaves less money for your other beneficiaries.

• Decide what you want to donate, such as cash or shares in a company. There are some tax benefits to donating assets other than cash. For example, there are special rules that say the estate won’t have to pay capital gains tax on securities that are gifted to a charity. 

• You may want to set up a charitable trust in your will. The money can be managed and invested by a trustee of your choosing. They can then give the income or assets to the charities over time.

• If you’re giving cash, you can choose to give a percentage of your estate or a specific dollar amount. If you leave a specific amount, this will be paid out before any part of your estate is paid to residual beneficiaries. Residual beneficiaries are typically close family members. So you’ll want to be fairly confident that your estate will be large enough to cover the charitable gift and still leave enough for your family.

• In your will, include the charity’s legal name and current address, registration number, and any instructions for how you want the donation to be used or spent. 

• You may want to name alternate charities in case the one you’ve chosen no longer exists or cannot use the gift as intended. If you don’t, the gift may lapse. Or, a court may direct that the gift be made to a different charity, as long as it falls within your general charitable intention.

An estates lawyer can walk through your options for making a charitable gift. They can also help you write your will so that your estate goes to the people and organizations that matter to you. You may also want to talk to a tax planner to help you structure the donation in a way that meets your tax planning goals.