Vancouver Charitable Giving and Law

Charitable Giving Lawyers in Vancouver

Many residents of Vancouver are interested in leaving a meaningful and lasting legacy to their communities or society as a whole after they pass away.

One effective way to achieve this goal is through charitable giving of assets: making a donation to a charitable organization.

If you have decided to make a charitable donation, it is crucial to consider the best way to do so. Besides making a cash donation, other options are available, each with its own tax implications. It is advisable to make your charitable contribution within the context of a well-structured estate plan.

The experienced team at Vest Estate Lawyers can help you understand your charitable giving options and provide guidance on how to leave your legacy most effectively.

What Constitutes a Gift in Charitable Giving?

A gift is generally defined as a voluntary transfer of money or property for which the donor expects and receives no compensation in return.

This may be a one-time donation or an ongoing series of payments. The gift may be given immediately or deferred and triggered at a later date.

These options will be discussed in more detail below. There are several other less common but equally valid forms of gifts, including:

• Certified cultural property: a special category for significant works of art and artifacts usually given to museums
• Gifts of ecologically sensitive land: made to the nation of Canada or one of its provinces, territories, or municipalities

It is important to note that time or services provided for the benefit of charitable organizations and property of little value (e.g., old furnishings) are not considered gifts.

Integrating Charitable Giving into Your Estate Plan

While the primary intention of making a charitable gift may be a generous one – to positively impact the community or a particular cause close to your heart – it is also wise to create a tax-effective estate plan.

Gifts can take many forms (explored below), each with its own benefits. Charitable giving can be included in a will or, for additional tax benefits, made while you are still living.

As no one can predict their lifespan, it is essential to consider your age and the resources you may need to maintain your lifestyle and meet family obligations before committing to a charitable gift.

Aim to build flexibility into your estate plan. Some people make a charitable donation of a fixed cash amount in their will according to their current financial situation. However, 10 or 20 years later, when the estate is administered, the executor may discover a very different financial situation and a lack of liquidity to fulfill the donation.

By donating life insurance instead of a fixed cash amount, this potential scenario can be avoided. However, your specific circumstances will dictate which gift option is best suited to your needs.

Tax Benefits of Charitable Donations in British Columbia

Although tax laws have been tightened over the past decade, donating part of your estate can still provide significant tax benefits.

With careful planning, tax savings can fund 40 percent or more of your charitable giving.

In most cases, up to 75 percent of your net income (as reported on your tax return) can be claimed as eligible charitable donations. In the year of death, up to 100 percent of your net income can be claimed.

The surviving spouse may be able to claim the tax credit for these donations against up to 75 percent of his or her net income, providing peace of mind that you are protecting your spouse’s interests while supporting a good cause.

Additional tax savings may apply, especially if the donation involves securities such as bonds or stocks, which is generally more tax-efficient than donating cash, as it eliminates capital gains tax.

You will receive a charitable donation receipt for the fair market value of shares/property, making this arrangement mutually beneficial for your estate and the charity.

Guidance on Charitable Giving in Vancouver

Charitable giving is just one aspect of managing your assets and creating an effective estate plan.

A lawyer from Vest Estate Lawyers can help you select the right option for charitable giving within the wider framework of your estate plan, ensuring a secure financial future for you, your retirement years, and your loved ones after you pass away.

Start with a one-on-one case consultation, during which we will listen to your goals and advise you of your options.