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Charitable Giving is an Effective Estate Planning Tool

Dec 29, 2016 11:02:00 AM Sheri MacMillan Estate Planning

Effective Charitable Giving for Estate PlanCharitable giving is a great way to help those who are not as fortunate as ourselves and it gets you involved in your community. And, as many people know, it is also an effective way to minimize your tax liability.

But it doesn’t have to end there.

Making a charitable donation as part of an estate plan is an admirable way to make a lasting social impact while also lowering your tax expenses, upon your passing, allowing you to do more with the money you have worked so hard for.

Planned giving can consist of varying assets.

Cash Donations

Making a cash donation is an easy way to transfer a portion of your estate to your charity of choice. However, it is important to ensure you have enough cash, or liquid assets, available to fulfill your wishes. Otherwise, your executor may need to sell another asset, such as a pice of real estate, to obtain the necessary funds.

Gifts in Kind

Gifts in kind are non-cash gifts, such as real estate, artwork, vehicles or equipment, that you want to leave to a charity of choice. Generally, these types of donations are handled in the same manner as cash donations but the amount of the qualifying donation is dependent on the items fair market value just prior to your death. It is necessary to know this amount so that you can receive an official donation receipt for the value of the item.

Most items will need to be appraised to determine the amount. The value of other gifts in kind, such as securities, will be easily obtained.

Life Insurance

Another method of donating to a charity, upon your passing, is designating a charity as the beneficiary of your life insurance policy. You would have to irrevocably designate the charity as the beneficiary, which means that you can, at no point, remove them as the beneficiary. So, it is important to consider this decision in advance.

If you choose this method, the premiums that you pay will be considered a donation.


Trusts are also a viable option in most circumstances. Creating a trust, that names a charity as the capital beneficiary allows the donor to continue to receive all income earned by the asset in the trust, such as a security, during their lifetime. At their passing, the trust’s assets would be transferred to the charity.

Similarly, placing real estate in a trust, that is to be left to a charity of your choosing, will give you the option to maintain use of the property until your passing. At which time, the property will be passed on to the charity.  


While there are many options for leaving a charitable donation as part of your estate plan, it is important to keep in mind that different tools will be more, or less, effective, depending on your situation.

Furthermore, while you can choose which charity that you will donate to, you can only donate to charities that are either a registered Canadian charity or another qualified recipient.

At MacMillan Estate Planning, our team of professional trust and estate practitioners, chartered accountants, financial planners, and legal professionals look forward to assisting you with the design of your estate plan and will ensure you build, protect, and enjoy your wealth. The information provided is general and may not be suited to your objectives or sufficient to ensure the protection of you and your family. You should not act on this information without providing MacMillan Estate Planning with the opportunity to ensure that it is suitable for your unique situation.

Sheri MacMillan

Written by Sheri MacMillan

Sheri MacMillan is the Founder & President of MacMillan Estate Planning Corp, Canada’s elite estate planning firm and is a highly respected industry leader

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