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Legacy giving and estate planning can be daunting, but a professional consultation can help.
A legacy gift is what someone is remembered for. It is how they impact future generations and care for their community or causes long after they are gone.
Choosing where to focus legacy giving can be daunting with so many worthy causes in need of support. Without the right kind of help, establishing a resilient legacy gift can seem almost impossible.
“It may be helpful to reflect on your values, the causes that have affected you or your loved ones or an underserved need you see in your community,” says Craig Hikida, vice-president, donor services at Vancouver Foundation. “For those who know exactly what they want their gift to achieve, it is important to allow flexibility so their chosen charities can always respond to future needs as they arise.”
For those who know more loosely the area where they’d like to focus their giving, Vancouver Foundation can help. Once a donor has decided on what their legacy will be, the how is the next consideration.
This is where consulting with a professional financial planner to ensure your personal and financial goals match is essential. “A professional can provide you with various options and advice,” says Kristy James, president and CEO, Burnaby Hospital Foundation. “This can involve developing a strategy for charitable giving depending on your applicable assets.”
Different strategies will take advantage of various tax benefits, so it is important to be clear on how you plan to structure a charitable legacy gift to make the most impact.
“The fact is, when you pass, your estate is likely to be responsible for taxes payable,” James says. “Leaving a bequest in a will, appreciated securities or life insurance can reduce your personal taxes and increase benefits to your estate and its beneficiaries. “And, while leaving a gift in your will is an emotional and practical decision, we have often found that donors who consult a professional can find a new realization about how they can support their charity of choice, while also ensuring that their loved ones are taken care of.”
Professionals also help donors navigate the complexities of gift and estate planning and avoid unnecessary fees. “This grows your legacy and gives you peace of mind,” Hikida says. “A professionally drafted plan will help ensure your estate is protected from potential costly legal challenges, which can result from something as simple as ambiguity in the language used.”
Consulting with a charitable organization prior to including them in your estate plans is highly recommended, especially if you intend to place any restrictions on the use of your gift. Otherwise, there is a risk that the charity may have to decline the gift in the future if the purpose can’t be met.
A named endowment fund can be established at Vancouver Foundation to receive a gift and make annual payments of income to your chosen registered charities or support your selected area of focus. “This simplifies the distribution of your estate for your executor and ensures that the charities receive steady, ongoing support in perpetuity,” Hikida says. “Donors who can’t decide on a charity or cause can rely on Vancouver Foundation’s community expertise to fund charitable projects across BC, ensuring your legacy always funds current and emerging needs.” Jennifer Shang, director, donor relations for Variety BC, says another option is leaving a gift of assets other than cash to save capital gains and estate taxes, and therefore make a bigger impact than you previously thought possible.
“Examples of other types of gifts you can leave are stocks and securities, life insurance, RRSPs or RRIFs, Annuities and more,” she says. Or consider establishing a donor advised fund through which you can donate a lump sum now but spread it among various charities or distribute it over several years. “This effectively creates a pseudo foundation for a fraction of the cost of setting up a private foundation,” Shang says. “You receive the tax receipt when you make the donation and can then allocate the funds to any of Canada’s registered charities.”
Marcie Flom, executive director, Jewish Community Foundation ofGreater Vancouver, says a critical part of legacy giving and estate planning is consulting with and involving family members. It is also critical to have realistic expectations about your family’s interests and capacity.
“It’s important to understand whether they are interested in participating,” she says. “Is there an active role for them? Do your interests and values align, and if so, how should the gift be structured?”
The Jewish Community Foundation has unique knowledge of the local, national and international Jewish community and can assist donors in support of the community as well as organizations outside of the Jewish community in areas like health and education.
Her team’s approach to legacy planning is to facilitate conversations about donors’ philanthropic objectives and what they hope to accomplish. “We can help them think about the possibilities and various gift vehicles to inform their discussion with their advisor,” she says. “We also facilitate family conversations, which are sometimes challenging for families to do on their own. This assists them in identifying their shared values and interests.”
Flom recommends working with a professional that takes the time to understand your goals in order to establish the best type of fund that will serve your needs in perpetuity.
“Your legacy will continue well after you’re gone, supporting the organizations or areas of interest that are important to you,” she says. “Community needs change—the Jewish Community Foundation can help build in the flexibility to ensure that your overall charitable objectives are realized even when the landscape changes.”
Burnaby Hospital Foundation has professional staff and a community of volunteer professionals, including lawyers, accountants, financial planners, and notaries, who can discuss your specific circumstances about estate planning.
“An exciting new addition this year, Burnaby Hospital Foundation has joined Will Power, a national public education campaign to inspire people to think differently about charitable giving,” James says. “By raising awareness and educating the public, Will Power aims to increase the number of Canadians contributing a portion of their will to charity, which can result in more funds contributed to supporting causes we all care about.”
Variety BCVariety BC has partnered with Willfora, a free resource to help make creating or updating a will easier than ever. Willfora allows you to create a legal will online in 20 minutes or less, at no cost to you.
“This way, you can take care of those you love, while helping create a future where special needs kids in BC are thriving, achieving their full potential and having their needs met every single day,” Shang says.
Hilary Beard, director, gifts and estate planning at BC Children’s Hospital Foundation (BCCHF), says BCCHF collaborates with top advisors to periodically offer estate planning education free of charge.
“It is our way of giving back to those whose support is deeply appreciated,” she says. Based on insights from estate administration, Beard’s top three tips for legacy planning would start with engaging the services of professionals who have a track record of estate planning.
“They can give you advice on various options, which take care of your family and navigate any difficult circumstances you may foresee,” she says. “Next, when you look at your current or anticipated wealth, think about the joy you could experience today by giving to make a difference, and the tax benefits now that need not be stored up for later.”
Finally, she recommends telling your charity in advance. “Our greatest joy is to say thank you when we can,” Beard says. “It is best summed up in the words of our Legacy Circle member who wrote to us after our recent appreciation tea: ‘… I could feel and hear in their [hospital team] voices the love that they have for each child… absolutely heartwarming, tears came to my eyes. Thank you for sharing this beautiful time with me.’”
Learn more:
Vancouver Foundation | vancouverfoundation.ca
BC Children’s Hospital Foundation | bcchf.ca
Burnaby Hospital Foundation | bhfoundation.ca/legacy
Jewish Community Foundation | jewishcommunityfoundation.com
Variety BC | variety.bc.ca/donate-now/planned-giving