Combination Gift Plans
Combining estate plans and lifetime financial plans can be challenging, especially for individuals who have dedicated a significant portion of their estate to charity, for example 50% or more. Wills are often drafted independently of lifetime financial plans. The drafting lawyer may not ask the question “is it prudent and advantageous to start giving major gift during life?”. In certain situations, there are significant tax and philanthropic benefits to start estate donations during life.
The Estate Donation Loop
It is one year after the new estate donation rules were introduced and the practical implementations are beginning to emerge. With the post-2016 rules, a twist arises when the residue of the estate is split between charity and individual beneficiaries. This scenario creates a gift that keeps giving.
Does Donor Recognition Create Obligations?
Is a donor obliged to provide ongoing support to a charity after a building or facility is named in their honour? The legal answer is “no”. Naming, however, may stir up complex feelings of ownership and hope, which often lead to misunderstandings — even after the donor is dead.
The Endowment Effect
People value objects more when they own or possess them – or at least when they presume ownership. In cognitive psychology this phenomenon is called the “endowment effect”. It’s a concept that was seemingly invented to describe a lot of behaviour related to estates, philanthropy and foundations. It’s time to give it a name.
Robert and Signe McMichael’s Complicated Legacy
Robert and Signe McMichael, the namesake of the McMichael Canadian Art Collection, were savvy art collectors who made some painful philanthropic and estate planning mistakes.
Intrinsic v. Extrinsic Giving
There is a fundraising truism that says you don’t get money unless you ask for it. But estate planning professional know that’s not always true.
Donate to Eliminate Clauses
Last week I received a call from a client who wished to include a “donate to eliminate” clause in his will. His goal is to wipe-out all taxes in his estate by giving just the right amount to his favorite charities…
Esther the Wonder Pig and Animal Sanctuaries
I am fortunate to work with many animal lovers on their philanthropic estate plans. They are interested in a wide range of animals and issues. A recent article in The Walrus magazine about the animal sanctuary, registered charity and social media phenomenon Happily Ever Esther Farm Sanctuary highlights a number of key estate planning and charity issues.
Donations from Spousal and Other Trusts
The issue: how can a testamentary spousal trust or an alter ego trust be drafted to enable a residual gift to charity be eligible for a tax receipt?
Estate Donations to Government
The title of this blog may provoke laughter, or perhaps, just head-shaking disbelief. But estate donations to various levels of government do happen. The trick is to ensure that the donor’s intentions are carried out.
Are Wills an essential service?
When facing the unknown we crave order and clarity. An updated will provides both.
Unrestricted Giving — In Life and Estates
An “ah ha” of COVID-19 is the importance of unrestricted giving to charity. Donors, foundations and charities are realizing that excess conditions may hinders responses to urgent social needs. Will this insight last beyond the pandemic? And does it apply to estate donations?
Valuing In-kind Donations
There is a saying among charitable gift planners: “beware of in-kind property donors who show up with valuations in hand.” In other words, eager donors and their gifts may be too good to be true. This is folk wisdom that points to a serious issue. Donors, executors and charities often struggle with in-kind donation valuation. Who commissions and pays for in-kind donation appraisals, the donor or charity?
Residual Interest Gifts of Homes
Can you donate the residual interest of a principal residence to charity? Absolutely! The question, however, is not can it be done, but should it be done. In most cases, the answer is no – especially for the charity.
Restricted gifts of real estate
When I was a young charitable gift planner, my charity was offered a cluster of islands on Georgian Bay. Surrounding the 100-year-old family cottage were sheds, cabins and boat houses. The donors had a vision: it would be a children’s camp.
How long is perpetuity?
“Is perpetuity 21 years?”, asked a charity colleague. “Well, no, it’s forever. Or until the end of time, or as long as we collectively exist,” I answered. Despite my emphatic response, the question is a good one because it underscores the inherent meaninglessness of the phrase “in perpetuity” in relation to charitable donations, trusts and endowments.
Name that Charity!
“Name That Charity” sounds like a failed 1960s game show. Instead, it is an approach to estate planning that paradoxically may discourage charitable giving.
Wine and Estates Revisited
When I last wrote about wine and estates it was 2019. A distant epoch. The Canadian situation has changed dramatically since then. Not only have I been drinking more and better wine (I’m not alone), but the secondary wine market has changed. It’s more liquid, if you will. This is helpful to wine collectors and executors.
Better Life Insurance Donations
Recently I received an inquiry from a life insurance advisor about a client who wished to establish a policy and donate it to two charities. My colleague wanted to know if this was possible. In my experience it is possible, but not the best way to do it.
Illiquid Assets and Estate Donations
Tax relief for an estate donation cannot be claimed until the property is transferred to a charity. No tax receipt; no tax credits. If the distribution is after 60 months after death of the donor there is no tax receipt at all. But what if the estate has illiquid assets that can’t easily be monetized, but may, possibly, be transferred in-kind to a charity?