A charitable bequest is simply a gift made in your will.
When you include a gift in your will, you can direct the gift to support a particular charitable program or activity. Or, you can allow the charity to decide how best to use the gift to support their greatest needs at that time. It is also important to use the correct legal name of the charity you would like to support. We recommend that you contact the charity directly to ensure your gift is directed where you intended and to make sure your wishes can be met.
Types of Bequests
There are different kinds of bequests including donating a specific sum of money, a percentage or portion of your estate, a transfer of securities or a gift of real estate. For each, you must use very specific language to indicate the precise distribution of your assets.
Here are a few examples:
A specific dollar amount or a particular asset is bequeathed. (e.g., $5,000, 100 shares of XYZ Company or 100 Anywhere Street, Nova Scotia)
This gift amount is what is left over in your estate, or a percentage of it, after all other gifts, debts, expenses and taxes have been paid. (e.g., the entire residue of your estate or 20% of the residue of your estate)
This gift allows you to leave your entire estate, or a portion of, to a particular charity if your named beneficiary does not survive you.
A well-prepared, up-to-date will is essential to ensure your future gift is exactly what you want it to be. We encourage you to talk to your professional advisor and your charity of choice. They will be able to help you decide which option(s) will work best for you and your family and will be able to provide you specific language to use. Download Sample Bequest Language (PDF)
A tax receipt will be issued to your estate for the amount of cash left to the organization or for the fair market value of property given.
You have the ability to provide future support to the charity of your choice with minimal impact to your current financial situation.
You can now eliminate the potential tax on capital gains by donating publicly traded securities directly to your favourite charity. This applies to publicly traded shares, bonds or mutual funds.
If you sell your appreciated securities, you will incur capital gains tax. However, if you donate them directly to a charitable organization, you will pay no tax on the capital gains and you will be issued a tax receipt for the full fair market value of the securities at the time the charitable organization receives them.
To arrange the gift of publicly traded securities, you or your broker need to contact the charitable organization, or check their website, to request a securities transfer form.
No capital gains tax
Tax receipt for the full fair market value at the time the charity receives the securities
You can make this type of gift now, or in your will
By giving through life insurance, you can make a significant future gift with only a small annual or monthly cost. There are several ways of leaving a legacy using life insurance and the tax savings are different for each.
You receive a tax receipt, significantly reducing the cost of the premiums if the charity is the owner and beneficiary of the policy.
The gift removes the policy proceeds from your estate, resulting in lower estate-related fees in the future.
You can make a significant charitable gift of the policy proceeds through payments of relatively small premiums over several years.
This type of gift will have minimal impact to your current financial situation.
A charitable gift annuity is an arrangement where you transfer a lump sum to a charity, usually through an annuity issuer such as a life insurance company. In exchange, you receive an immediate tax receipt as well as fixed, guaranteed income for life or for a term of years. Depending, your annuity income may be partly or fully tax-free. There are several types of annuities:
Tax benefits range depending on the annuity arrangement
You receive guaranteed payments for life (or a term of years), all or substantially tax-free
Gifts of retirement plans are made when you name a registered charity of your choice as the designated beneficiary. This means that upon your death the charity would receive the proceeds and your estate will receive a charitable receipt. This receipt will counterbalance the tax payable on your final tax return.
It is recommended that you consult with the financial institution holding your RRSP/RRIF to ensure that it permits the designation of charities as beneficiaries.
Your estate will receive a donation receipt to be applied against tax on the distribution of retirement funds.
The gift removes the proceeds from your estate, resulting in lower estate-related fees in the future.