If you are thinking about including a charitable donation bequest in your will, here are some pointers:
While philanthropy is a noble cause, your family comes first. Make sure that your spouse and other dependents will be adequately provided for after your death, and in accordance with your wishes.
Ensure that your estate will have sufficient liquid assets to cover the donation under your will, without forcing your executors to liquidate other assets in order to raise the cash.
Make sure that you identify the desired charity by its precise full legal name and include the charity’s address and phone number. There have been many legal battles over the years where more than one charity with the same or similar name has laid claim to a donation mentioned in a deceased person’s will, where the address of the charity was not stated.
Ensure that the tax consequences of any donations under your will are well thought out in advance. For example, if you own any Canadian “Group of Seven” paintings or other assets that you think might qualify as certified cultural property,you may want to clarify the tax status of such assets during your lifetime and obtain the necessary certification from the CRA.
If you intend to make a substantial donation to one or more charities upon your death, explore the idea of making gifts during your lifetime under a planned giving program, which might produce better overall tax results than if the donations only took effect after your death.
Keep in mind that legislation varies from province to province on issues relating to wills and donations to private foundations. For example, in British Columbia, there is legislation to apply to the court during the probate process, to ask to vary a will following the death of the person involved. In this scenario, the claimant could feel that the distribution of assets was not fair or equitable in the circumstances, and wishes to challenge the will distribution. In some provinces there is legislation giving the right for someone claiming to be a dependent to challenge the will during the probate process, on the basis that the distribution of assets of the deceased did not adequately or equitably account for the needs of the dependent person.
