Creating a Legacy in Your Will: A Legal Perspective
As part of Waterloo Region Community Foundation’s (WRCF) Will Power series, we chatted with estate lawyers Warren Griffin and John Kendall, of Giesbrecht, Griffin, Funk & Irvine LLP. We asked them for their perspective on the benefits of including a charity as a beneficiary in a Will, as well as how having clients partner with an organization like WRCF can help make the process that much easier.
Q&A
In your experience, what are some of the reasons your clients have chosen to donate to charity in their Will?
John: Often people who donate to charity in their Wills are those who have been giving in their lifetime, both dollars and time. They are actively involved in assisting charities, religious organizations or service organizations, or serving as a volunteer on a board, etc. And they can see the need far better than others may be able to see it, and they appreciate that the need is out there.
Warren: I would agree with John. Those people who have a legacy of giving while they are alive will carry that out in their Wills.
Are there any benefits to including a charity in a Will?
Warren: It might be that they have a modest income now, so that giving now might not make that much of a tax difference. But perhaps they have a cottage that they inherited from generations ago, and now it has a huge capital gain associated with the sale of it. So they may think to leave more to charity because that will reduce some of the tax liability.
John: Clients with stock portfolios that have enjoyed appreciation in value would be well advised to speak with their accountant to see if the donation of specific stock(s) or portfolios to a charity or charities could have a tax advantage for them.
When would an organization like WRCF make sense to suggest to a client to partner?
Warren: One of the challenges with giving to charities is: the charities today that are near and dear to somebody’s heart may not still be near and dear to their hearts in 10, 15, 20 years down the road. They may not even exist anymore. And it means, if you name charities in the Will and you change your mind, you have to change your Will.
One of the real advantages of WRCF is that you can pick a charity today that is near and dear to your heart, and five years down the road change your mind…and you can just change the instructions with WRCF as to which charity benefits. So it creates tremendous flexibility for the client to have that as an option because the Will says give it to WRCF to be used in accordance with the instructions you’ve given them. Change the instructions – it doesn’t cost a penny.
How does the conversation differ for those clients that have immediate family they want to leave something to versus those clients who don’t have immediate family?
Warren: People usually come in with a pre-set idea of what they want to do. I often send out a questionnaire to clients about what they might want to do. But they often want everything to go to the kids, and if not them, grandkids. And my question to the client then is, who do you want to give a gift to. Is it a family member or a charity, or, if possible, both?
John: Some clients may only have one child and maybe a few grandchildren. With families like that, there aren’t a lot of residual beneficiaries. But say there’s a situation where they’re all on a plane and it crashed. We will ask if something should happen to all those limited family members who should then receive the residue of their estate. And if they don’t have another person — a family member or a friend in mind— I will suggest picking a charity.
What would you say to your colleagues when it comes to supporting their clients’ philanthropy?
Warren: It would start as a conversation about Wills and a question I might put to them is: How do you deal with clients who say they want to leave things to a specific charity? How do you deal with that? What’s your approach? And what if they change their mind? How do you deal with that? Have you looked at an organization like WRCF? Yes, it’s taking money out of our pockets as lawyers, but I think we’re doing a better job for our clients by recommending that as an option.
What are the different ways that people can use their Wills to support their favourite charities?
A fixed dollar amount
A percentage of the overall estate value
Life insurance
Securities (stocks, mutual funds, etc.)
RRSP, TFSA, RRIF accounts
Property
How to set up a bequest
The process for setting up a bequest is very straightforward. WRCF works with you to set up the fund agreement, which references that the fund will become active via a gift from the Will. Then, in your Will, you list WRCF as receiving a bequest. Fundholders can choose from a variety of types of funds. When WRCF receives the money via the estate, the fund becomes operational.
It’s important to note that future Fundholders can update their fund agreements with WRCF as many times as they’d like in their lifetime (at no cost). Regardless of any changes to the fund agreement, there is no need to subsequently update their Wills, as the Will just indicates that the bequest will be sent to WRCF; it is the fund agreement with WRCF that dictates what happens when the donation from the estate is received.
For more information about setting up a bequest and to ensure that you have the proper wording for your Will, contact Dan Robert at dan@wrcf.ca or 519-725-1806 x 205.
Warren Griffin│ Partner
GGFI Law LLP
515 Riverbend Drive, Suite 200
Kitchener, ON N2K 3S3
T: 519-579-4300 x 224
F: 519-579-8745
Note: This article was written prior to Cambridge & North Dumfries Community Foundation and Kitchener Waterloo Community Foundation unifying to become Waterloo Region Community Foundation. Although the article was created by KWCF, we have updated the organization name to WRCF throughout the text.