Strategies for Giving

Through Your Will

It is estimated that only three in ten Canadians have a will, due to oversight, delay, or an extraordinary confidence in the government's ability to deal with individual property! If you are among the many Canadians who leave no specific testamentary instructions, your lifetime accumulation of wealth will be distributed according to provincial law, which may not have been the way you would have apportioned it. And if you have no heirs, the provincial government will receive your property as part of its general revenues.

Making a will need not be complicated, and it should be done with proper legal assistance. Providing for a gift to charity in your will can easily be accomplished. Here are some examples of various forms of bequests, with appropriate wording.

A general bequest designates a certain dollar amount of property, usually cash, to the charity you select: I give to The University of Winnipeg Foundation Inc., the sum of $100,000 to be used at the discretion of its directors.

A specific bequest directs that the charity is to receive a specific piece of property: I give to the University of Winnipeg Foundation Inc., 500 shares of XYZ stock...

A residual bequest designates for the charity all or a portion of whatever remains after all debts, taxes, expenses, and other bequests have been paid: I give to the University of Winnipeg Foundation Inc., twenty percent (20 percent) of the residue of my estate...

A contingent bequest takes effect only under certain conditions: In the event that my wife does not survive me, I give to The University of Winnipeg Foundation Inc., the sum of...

In addition to choosing the form of a bequest, you also have choices as to the purpose for which your gift will be used. Most bequests to charity are unrestricted, supporting the general purpose of the charity, but you may choose to make a restricted bequest directed to support a particular program or service.

Many charities have endowments where you can specify that the principle of your bequest to be held forever, with only the income expended for the purpose you designate. It also may be possible to name the endowment fund in your name or as a memorial to a family member, friend, or colleague.

If you are planning a bequest, it is important to confer in advance with the University of Winnipeg Foundation Inc., to be sure that your specific wishes can be met and that your bequest provision is properly worded.

Tax Implications of a Charitable Bequest

When you make a bequest to charity, your estate is entitled to a gift receipt for the full value of the bequest. This can significantly reduce the tax payable when your final income tax return is filed. If the total bequest exceeds 100 percent of your net income in the year of death, the excess (again, subject to the applicable limits) may be carried back to the preceding year, producing a refund for that year.

To illustrate: In his will, a widower leaves $100,000 to a registered charity and the remainder of his estate to his two children. Assuming the net income on his final income tax return is large enough for the entire bequest to be claimed in the year of his death, the bequest will result in a combined federal and provincial tax savings of approximately $46,000.

Many individuals find peace of mind and satisfaction in knowing that they have not only provided for their immediate families but also for the charitable organizations that enriched their lives and those of others.