1. What Is a Charitable Gift in a Will?

2. What Does Alberta Law Say?

3. How the Process Works

4. Should You Tell the Charity About Your Gift?

5. Common Mistakes

6. Costs and Considerations

7. When Should You Speak With an Estate Lawyer?

8. How Bridgestone Law Can Help

Introduction

Many people spend their lives supporting causes that are important to them. Whether it is a local animal rescue, hospital foundation, educational institution, religious organization, or community charity, these organizations often reflect values that have shaped a person's life.

As part of estate planning, many Albertans choose to continue that support by leaving a charitable gift in their will.

A charitable gift in your will, often called a charitable bequest, is a meaningful way to leave a lasting legacy while potentially providing tax advantages for your estate. You can leave a specific amount of money, a percentage of your estate, a particular asset, or the balance of your estate after other gifts have been distributed. Careful planning helps ensure your gift reaches the intended organization and reflects your wishes.

Including a charitable gift does not necessarily reduce what your loved ones receive. In some cases, thoughtful estate planning can balance gifts to family with charitable giving while also considering potential tax implications.

What Is a Charitable Gift in a Will?

A charitable gift in a will is a donation that takes effect after your death.

Instead of making a donation during your lifetime, your will directs your executor to distribute part of your estate to one or more registered charities after your debts, taxes, and estate administration expenses have been addressed.

A charitable gift may consist of:

• a fixed sum of money;

• a percentage of your estate;

• a specific asset;

• the residue of your estate;

• real estate;

• publicly traded securities;

• artwork or collectibles; or

• other property owned by your estate.

You may choose to support one charity or divide your gift among several organizations.

What Does Alberta Law Say?

In Alberta, charitable gifts made through a valid will are generally governed by the Wills and Succession Act, while the administration of the estate is governed by the Estate Administration Act.

To ensure your gift is effective, the charity should be clearly identified in your will. Using the charity's full legal name can help avoid confusion, particularly where organizations have similar names or operate through affiliated foundations.

If your charitable gift qualifies under Canadian tax law, your executor may also be able to claim charitable donation tax credits on the estate's income tax returns, subject to the applicable provisions of the Income Tax Act (Canada) and Canada Revenue Agency requirements.

Careful drafting helps ensure both your charitable intentions and any available tax planning opportunities are properly addressed.

How the Process Works

Step 1: Choose the Charity

Begin by identifying the organization you wish to support.

Many Albertans choose charities such as:

• hospitals;

• universities;

• religious organizations;

• community foundations;

• animal welfare organizations;

• environmental charities;

• arts organizations; or

• humanitarian organizations.

Whenever possible, use the charity's full legal name in your will.

Step 2: Decide What Type of Gift You Wish to Leave

There are several ways to structure a charitable gift.

Common options include:

A Specific Gift

For example:

"I leave $25,000 to the Calgary Health Foundation."

This provides certainty regarding the amount the charity will receive.

A Percentage of Your Estate

Instead of leaving a fixed amount, you may leave a percentage of your estate.

This allows the value of the gift to increase or decrease with the size of your estate.

A Residual Gift

Some people choose to leave all or part of the residue of their estate to charity after all other gifts, debts, taxes, and administration expenses have been paid.

A Gift of Specific Property

Rather than money, you may leave:

• shares;

• real estate;

• artwork;

• collectibles;

• business interests; or

• other valuable assets.

Depending on the asset, additional tax planning may be appropriate.

Step 3: Review the Tax Implications

Charitable gifts may provide tax benefits to your estate.

Depending on the circumstances, charitable donation tax credits may reduce the estate's overall tax liability.

Because every estate is different, it is often beneficial for your lawyer and accountant to work together when significant charitable gifts are involved.

Step 4: Review Your Estate Plan Regularly

Charities sometimes merge, change their legal names, or alter their programs.

Reviewing your will periodically helps ensure:

• the organization still exists;

• its legal name remains accurate;

• the gift continues to reflect your wishes; and

• your overall estate plan remains appropriate as your family and financial circumstances evolve.

Should You Tell the Charity About Your Gift?

Although there is generally no legal requirement to notify a charity that you have included it in your will, many people choose to do so.

Informing the charity during your lifetime can have several benefits.

The charity may:

• confirm its correct legal name;

• explain how it prefers charitable gifts to be structured;

• discuss programs or initiatives you may wish to support;

• answer questions about establishing an endowment or named fund; and

• acknowledge your planned legacy, if you wish.

Some charities also have dedicated legacy giving representatives who can work with you and your lawyer to help ensure your intentions are accurately reflected.

Of course, if you prefer to keep your estate planning private, that choice should be respected. Your executor can notify the charity after your death when the estate is ready to administer the gift.

Practical Examples

Example One: Supporting a Local Hospital

Margaret has volunteered at her local hospital for more than twenty years.

When preparing her will, she decides to leave five percent of the residue of her estate to the hospital foundation after her family has received their specific gifts.

Because the gift is expressed as a percentage, it will adjust automatically if the value of her estate changes over time.

Example Two: Leaving Publicly Traded Shares

David owns a portfolio of publicly traded securities.

After speaking with both his lawyer and accountant, he decides to leave certain shares to a registered charity.

His estate planning considers both his charitable goals and the potential tax implications of donating appreciated investments.

Example Three: Supporting an Animal Rescue

Helen has adopted several rescue dogs throughout her life.

She leaves a specific cash gift to a registered animal rescue organization together with detailed instructions identifying the charity by its full legal name.

Her executor is able to distribute the gift without uncertainty because the will clearly identifies the intended organization.

Common Mistakes

Using an Incorrect Charity Name

Many charities operate through foundations, affiliated organizations, or have similar names.

Using the charity's complete legal name helps ensure the gift reaches the intended recipient.

Forgetting to Review the Will

Charities sometimes merge, change their names, or cease operations.

Reviewing your estate plan periodically helps ensure your charitable gifts remain effective.

Leaving Ambiguous Instructions

Statements such as "leave money to the local hospital" may create uncertainty if multiple organizations are associated with that hospital.

Specific wording generally reduces the likelihood of disputes or delays.

Failing to Consider Tax Planning

Large charitable gifts may have important tax implications for your estate.

Obtaining legal and accounting advice during the planning process may allow your charitable objectives and tax planning strategies to work together more effectively.

Giving Away Assets Needed by Your Family

Charitable giving should be considered as part of your overall estate plan.

Your will should balance your desire to support charitable causes with your obligations and intentions regarding your family and other beneficiaries.

Costs and Considerations

Including a charitable gift in your will generally does not significantly increase the cost of preparing a will.

However, additional planning may be appropriate where:

• substantial charitable gifts are involved;

• tax planning is a priority;

• gifts involve businesses or corporations;

• gifts involve real estate;

• publicly traded securities are being donated;

• multiple charities are named; or

• a charitable trust is being established.

Although more sophisticated planning may involve additional legal or accounting fees, it can provide greater certainty and help maximize both your charitable impact and the efficiency of your estate administration.

When Should You Speak With an Estate Lawyer?

Professional legal advice is particularly valuable if:

• you wish to leave a significant charitable gift;

• your estate includes businesses or corporations;

• you own investment portfolios or appreciated securities;

• you wish to establish a charitable trust;

• you have a blended family;

• your charitable goals must be balanced with gifts to family members;

• you own property outside Alberta;

• you wish to minimize tax consequences; or

• you are updating an older estate plan.

An estate lawyer can help ensure your charitable intentions are clearly documented and integrated into a comprehensive estate plan that reflects your overall goals.

How Bridgestone Law Can Help

A charitable gift in your will allows you to support the organizations and causes that have been meaningful throughout your lifetime while creating a lasting legacy for future generations. With careful planning, charitable giving can often be incorporated into your estate plan in a way that provides clarity for your executor, support for your loved ones, and meaningful assistance to the charities you care about.

Bridgestone Law assists individuals and families throughout Calgary and Alberta with wills, estate planning, probate, and estate administration. We can help you prepare a comprehensive estate plan, structure charitable gifts appropriately, coordinate with your accountant where tax planning is involved, and ensure your wishes are clearly documented.