Guest Blog – Donating To Charity In Your Will

Donating to charity in your will is an action that can make a tremendous difference to your community and the world. But often, people don’t take action even though they can have a significant impact on their own lives and the lives of others.

Why is that? What are the barriers to taking action?

When we look around, we see so many problems that could use our help. This can be discouraging and overwhelming, leading us to give up the idea and do nothing for many reasons.

The Challenge With Donating In Your Will

To begin with, we may not know where to start. We look around and see the need to help families with challenging disabilities, refugees who are new to our country, cancer patients and their families who need coaching, Alzheimer’s patients who need to remain independent as long as possible, teenagers experiencing mental health challenges, young students in disadvantaged neighborhoods who need access to school supplies and sports equipment, community hospitals badly in need of equipment, and so many other worthwhile causes. How do we choose between them?
We may also assume that this is the job of the charitable sector. But the truth is that many charities are suffering due to a reduction in donor support while the demand for their services has been increasing. So it is up to us to take action and make a difference in the world.

“If we don’t change the direction we’re going, we are likely to end up where we are headed.”

Lao Tzu

As Gandhi said, “For things to change, first I must change.” We all need to have hope and believe that we can make a difference – but it takes a great deal of courage to have hope.

Beginning The Process

So, where do we start? Can we inspire hope within ourselves and others?

I believe we can! The more I learn and interact with charities, their donors, and our clients, the more I see the powerful impact of donating in wills, and the more I want to get involved.

I’ve learned firsthand that engaging in this process ultimately changes me, my mindset, and my perspective in positive ways. The more I open up the discussion with my clients and ask specific questions from an appreciative inquiry point of view, the more I see increased gifts in wills and the awareness of and desire to impact the world and the lives of others.

Finding Inspiration for Transformation

Beginning our transformation to change the world is a great starting point; however, we have also found that many people get stopped in their desire to give back by some genuine and complex challenges and barriers.

We believe that together we can overcome these hurdles.

To begin, we often ask our clients, “who and what has made a difference in your life and how did they make a difference?” This leads us to hear stores such as these:

“The YMCA of Eastern Ontario provided our disabled child with the support and resources to compete in the Special Olympics, which gave them a reason to feel proud.”

“ Donations made to The Almonte Hospital and Fairview Manor provided the medical emergency equipment used to diagnose our acute condition so that the treatment could save our lives.”

“The March of Dimes provided our disabled child with the support they needed to be and work as independently as possible.”
“Friends of the Earth Canada is helping to protect our environment, and our biodiversity needs to thrive and survive on our beautiful planet.”

These stories provide us with inspiration and hope, which is a great place to begin when thinking about leaving a gift in your will. But we need to go further and address the major challenges and problems people face when thinking about their legacy.

5 Ways To Overcome Challenges To Donating In Your Will

Here are 5 significant challenges and problems people encounter when thinking about their legacy and leaving a gift in their will to their favorite charity or charities – and some solutions!

1 – Choosing Between Your Family and A Charity

The Problem:

Most people believe they have to choose between their families and their favorite charities whenever they think about who they want to receive their financial and other assets, for example, their investments, home, cottage, furniture, and the money in their bank account.

The Challenge:

The financial services industry perpetuates this perspective and mindset due to a lack of understanding and financial planning to prove otherwise. It’s perfectly natural to want to pass on what you’ve built up over the years to your family members, starting with your surviving spouse (if you have one) and indeed the right thing to do. Where the challenge comes in for most Canadians is you’ve been led to believe you have to choose, and you haven’t been shown how to do otherwise.

The Solution:

What is required is a holistic view of your assets, examining the tax implications at your or your surviving spouse’s death while exploring how a charitable gift could minimize or even eliminate those taxes. This takes time, energy, and a level of expertise and knowledge that only certain types of Financial Planners have. For example, a Financial Planner who also specializes in Philanthropy can help guide you through this process.

2 – Choosing A Charity To Support

The Problem:

“We don’t know what charity we want to support. We do know what we’d like to see happen, what impact we’d like to have with our gifts in our wills; however, the actual charity we want to support is more of a challenge for us.” We hear this quite often in our practice!

The Challenge:

When you start to explore your legacy impact in more detail and get a clearer sense of what kind of impact you’d like to have, the myriad of charitable organizations can be overwhelming. This can stop the process of establishing a gift in a will in its tracks! As Financial Planners specializing in Philanthropy and Legacy Planning, we do everything we can to match up the work being done and the values of the charitable organizations with those of our clients. However, that can be enormously challenging from both a time and energy point of view – do you know how many charities are listed with the CRA – thousands!

The Solution:

We’re optimistic that the charity listings in the WillPower Campaign will help people make more informed decisions. At the same time, what would also help is clear, concise information for donors. It is essential for charities to have obvious information on their websites that donors want to see – for example – the types of problems solved and the impact donors can have. We encourage you to reach out to the charities you may be interested in supporting as they have staff who’d be happy to chat with you to tell you more about what they do within the context of what you want to achieve.

3 – Financial Advisor Limitations

The Problem:

“My Financial Advisor has made it abundantly clear to me that they don’t do estate planning or legacy planning. All they do is take care of my investments!”

The Challenge:

Your trusted advisor is doing a great job of taking care of your investments, and you don’t want to seek out anyone else’s advice as you believe that this is just the way it is!

The Solution:

There’s a difference between a Financial Advisor and a Certified Financial Planner (CFP). If possible, seek out the advice of a CFP, who, in addition to investing money for you, will be able to come up with a plan for how best to provide gifts to charities both now and in the future. This plan will ensure that you and your family are well taken care of BEFORE exploring how you can also meet your charitable giving and philanthropic goals. If you’d prefer to keep your current investment advisor, you can pay the CFP for their time. Most CFP’s will also provide you with a Letter of Engagement outlining the details of their services along with the costs for those services before they start doing the work with you. That way, you can determine if you’d like to work with a CFP who charges for their services to help guide you through the estate planning process. Make sure the CFP has expertise in estate & legacy planning as that will ensure you are well-advised going forward.

4 – Your Financial Advisor Disagrees

The Problem:

I spoke with my favorite charity that I want to support. We discussed in detail what I’d like them to do with my gift and when I mentioned this to my Financial Advisor, they told me not to do it! So now I don’t know what to do.

The Challenge:

Most Financial Advisors are paid via your investments, so any discussion about charitable gifts sends up a red flag as this could result in fewer assets/investments to manage.

The Solution:

Dig a little deeper into the “don’t do it” response and ask why or why not? You have a right to know and understand what the rationale is behind the recommendations your Financial Advisor (FA) is giving you. Sometimes it’s simply a matter of the FA gaining a better understanding of what you want to accomplish. Seek out the information you need to understand your options and the advantages and disadvantages of different charitable giving strategies.

5 – Understanding Using Insurance Policies To Donate

The Problem:

I have an insurance policy that I don’t need anymore. Should I just cancel it, or what else should I be thinking about and considering before I do that? I think perhaps I could keep it and name my favorite charity as the beneficiary of the policy. What should I do?

The Challenge:

Not all types of insurance policies are suited for charities. There are so many different insurance policies, term, term to age 100, whole life, limited pay, participating/non-participating, some with cash values and some without. Not to mention how difficult it can be to figure out the exact type of insurance policy you have.

The Solution:

Insurance policies are a great way to maximize your gift to a charity. Even though you may not even have the original insurance contract/policy, if you have a recent statement from the insurance company, you should be able to find out more about your insurance policy, how it’s structured, and the type of policy. You can find this information from the person who sold you this policy, or if they aren’t around, other licensed insurance advisors can obtain that information on your behalf. A life insurance policy owned by the charity and made the beneficiary of that policy can be a great way to magnify your gift and, therefore, your impact and provide the charity with cash so long as it is structured in a particular way. Talk to a knowledgeable insurance licensed professional to review your options and learn more.

Making A Difference With Our Legacy

As you can see, we believe that more and more people, especially as we age, want to have enhanced meaning in our lives as we question what impact we’ve had on our children, our families, and the world at large. Making a donation or a gift in our will is a meaningful and impactful way to do that.

As we begin to explore further and develop our legacy values and the corresponding impact we want to have, we experience pleasure in knowing our lives have had significant meaning. What that meaning ultimately becomes for you is a very personal journey.

Our goal (and our legacy) is to help direct an additional 5 million dollars to charities via charitable giving life insurance policies or gifts in wills. Our commitment to this goal and our clients comes from our values as Certified Financial Planners in the financial services business.

We know and understand that money is a tool that we can use to enhance our own lives, the lives of others and use it to build a world we can all be proud of. Donating a gift in your will is a part of that journey.