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Sunday, December 13, 2020

Former teacher leaves $4.8million in her will to McGill University

Recently I noticed this story in which Mary Marsh, a former teacher in Montreal, left a large bequest - $4,800,000 - to her alma mater, McGill University. The funds are going to be used to top up scholarship funds that Mrs. Marsh  had already established at the university in the memory of her late husband. This generosity will help additional students in the Faculty of Education reach their goals.

Leaving charitable gifts in wills seems to remain popular. Many of my clients give charitable donations in their wills, even though most cannot afford to give on the scale of Mary Marsh. Most wish to donate to causes that lift up the local community, such as animal shelters, hospitals, women's shelters, and organizations to assist those in dire need. Others think on a global scale and wish to assist organizations that send medical aid to the poorest countries. 

When you leave funds to a university, as Mrs. Marsh did, you can specify which faculty is to benefit, and can even add additional conditions. Some suggestions might be the specific program, the year of the program, financial need of the student, academic achievement, the country of origin of the student, etc. Be cautioned, though, that it is possible to put too narrow a definition on your potential candidates so that nobody fits your profile!

The point is that each of us can express our personal wishes and views by choosing a charitable cause that holds personal meaning.

The motivation for leaving a gift like this in a will is almost 100% of the time motivated by a wish to do something good for someone else. However, there are practical, financial perks to making a charitable testamentary gift as well. For one thing, your estate will reap the benefit of receiving a charitable receipt which can be offset against taxes, just as we do when we make a charitable gift during our lifetimes.

Secondly, registered charities have special tax rules that can be very advantageous to an estate. Let's say, for example, that a deceased person owns shares that upon sale or transfer will be taxed for capital gains. The estate pays that tax. However, if the same shares are left to a charity, the special rules will enable the charity to receive the shares without being taxed. You can see that this will make the gift go a lot further than it would if the deceased left it to his nephew or granddaughter directly. If you plan to make a charitable gift in your will, you might want to have a conversation about this with your estate planner.

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