The best estate plan in the history of the world

That's a pretty ambitious title - "the best estate plan in the history of the world". Whether or not you agree that the estate plan set up by its originator, James, is the world's best is really a matter of personal philosophy.  His plan involved leaving none of his millions of dollars to his four children, and leaving it all to charities except for $3. I'm attaching an article from the Farm and Ranch Guide, which tells James' story. Click here to read it and decide for yourself whether this is a good way to deal with your estate and your children (and to find out what the $3 was for).

Distant relative may inherit gold fortune found in man's garage

This news story was reported in the National Post. Walter Samaszko Jr. died leaving $7.4 million in gold in his garage as well as a few other assets. He left no will, and the estate is going to a distant relative who has been located by genealogists. Click here to read the story.

I wonder why Mr. Samaszko never made a will? Apparently Mr. Samaszko had no children or other close living relatives. I've met a number of people who don't have children and therefore don't really know what to do with their estates. They sometimes put off doing their wills while they think about it. This often results in someone passing away without ever having done a will. You'll note at the end of the National Post story that a number of people are calling to claim a share of Mr. Samaszko's estate, and one person is so persistent (despite having no support or proof of his claim) that they had to get some type of court injunction against him.

That is always a danger when someone leaves a large amount of money with no will; relatives, friends and complete strangers come out of the woodwork hoping to get a piece of the pie.

There are plenty of things you can do with an estate even if you don't have children to whom you can leave your money. If you don't feel like leaving it to your siblings or other relatives, you should consider charities. Everyone from food banks to animal shelters could use a hand. You could set up a scholarship for deserving but financially disadvantaged students. You could leave money to build a park or set aside land for an ecological reserve. Your options are limited only by the size of the estate.

I really don't know whether this was Mr. Samaszko's reason for not making a will. But if it was, it's too bad he didn't talk to an estate planner to find out some great ideas for sharing his fortune in a creative, positive way.

Donate securities to charity (and be a bit of a tax Scrooge)

You may have heard that there are tax advantages to giving to charity, particularly if you want to give shares and securities, but do you really understand how it works? Do you know whether it might work for you? I'm attaching a link to an excellent article in the Globe and Mail by Tim Cestnick that really explains it well. Click here to read it. Although the article talks about charitable giving while you're alive, the same tax principles apply to giving to charities through your will.

An entrepreneur's guide to giving wealth away

I always like finding articles that can talk about tax in plain language. The attached is one of those, and author Tim Cestnick does a great job explaining how owners of small businesses can get tax breaks both in their lifetimes and at the time of their deaths. Click here to read the article from the Globe and Mail.

2011-12 Donor's Guide is now available

This blurb from http://www.donorsguide.ca/ says it all (paper copies are available, but note the link below to the online digital edition (free):

“The Canadian Donor’s Guide is like the Yellow Pages: an essential first-line resource for lawyers and donors. It’s an essential outlet for any charity that is serious about planned giving.” ~ Malcolm Burrows, Head, Philanthropic Advisory Services, Scotia Private Client Group

The Canadian Donor’s Guide to fundraising organizations in Canada (Guide des donateurs canadiens faisant état des organismes de souscription de fonds) is the only authoritative annual directory to charity in Canada, primarily used in planned giving. Donors, Philanthropists, Lawyers, Accountants, Trust Officers, Will and Estate Planning Officers, Taxation Professionals, Financial, Insurance and Investment Advisors, and other professionals use the Canadian Donor’s Guide to make decisions on philanthropy: bequests, major donations, and other charitable gifts.

The Canadian Donor’s Guide is the annual reference book for donors and their advisors containing data on charities collected by questionnaire as well as pertinent editorial content. No other publication contains this breadth of information on charities in Canada.

Available both in print and online in our Digital Edition. Sponsored by Scotia Private Client Group. Published with co-operation of the Canadian Bar Association, Imagine Canada, and Canadian Association of Gift Planners.

(Attached photo is also from http://www.donorsguide.ca/ ).

Causes and charities: Make sure your wishes are carried out

The new annual Donor's Guide is out. There is a really good article in it that talks about the difference between charities and causes, and how using a charitable foundation such as Aqueduct can work so smoothly and effectively. Take the time to check this out if you are thinking about giving to charities in your will. Click here to read the article.

The conversation of a lifetime

This week I had a conversation with a client who wants to leave his estate almost entirely to charities. His estate is in the tens of millions of dollars. The reason I felt so lucky to be talking with him is that he is thinking of doing "something for seniors" and was casting around for ideas. I actually got to give suggestions that I felt would improve the lives of seniors to someone who was openly listening and was prepared and able to take action on those suggestions.

So far he likes the idea of building affordable homes that are purpose-built for those with mobility issues and other physical limitations. He also likes the idea of advancing financial literacy for seniors and supporting programs that provide seniors with practical information and help.

He isn't looking for praise or thanks or recognition. He just realizes that he has a huge opportunity to improve the lives of thousands of people. I regularly speak with wealthy clients who want to give to charities (Canadians are definitely generous givers) but I don't recall any who specifically wanted to benefit seniors.

I'd sure like to have dozens of clients with this area of interest and similar means of support. However, I suspect I'll probably never have another!

Does your money go to your children, charity or CRA? Pick two.

This article from http://www.capitalmagazine.ca/ discusses how Canadians are looking for ways to build charitable giving into their estate plans. This definitely accords with my own experience, as many clients, both wealthy and not so wealthy talk to me about their plans to leave money to charities or to charitable foundations. Click here to read the article.

How to make a bigger donation for less money

This article from the Globe and Mail discusses the logistics of planned charitable giving, and how to make that large gift more effectively than you thought possible. Click here to read the article.

Charitable giving has social and tax benefits

Most of us know that giving to charities makes us feel good. But do you know about the tax benefits? Click on the link below to read this story from the Calgary Herald. Charitable giving has social and tax benefits

Can I leave my estate to charity?

A reader recently asked whether he could leave his full estate to charity. While many individuals want to leave specific amounts of money to various charities that have touched their lives, some individuals want to give their full estates. If this is something you are considering, here are some things to think about:

1.  Before you can give your estate to a charity, you must make sure that you leave adequate support for your dependants, if you have any. These are normally your spouse, your minor children, and adult children who can't earn a living because of a handicap.

2.  If you do not make a will, your estate will not go to charity. Period.

3.  Your estate doesn't have to be completely liquid to leave it to charity. If your estate a house in it, for example, the house would be sold by your executor and the money given to the charity.

4.  Make sure that you are very specific about which charities you wish to benefit. For example, if you just say "the cancer society", you should be aware that there is a national cancer society, several provincial societies, and many charities that are focused on specific kinds of charity (e.g. breast cancer) or specific groups who suffer from cancer (e.g. children) or specific hospitals. If you are unclear in your will about who is to receive the money, your estate could end up in court. Not all court applications are necessarily a fight; some are simply to figure out what a poorly drafted will is supposed to mean.

5.  It is often possible to name a specific purpose for a charitable gift, but you should be careful about this. You can, for example, say that funds are to be used for research or a building fund or a specific project. If you do so, you run the risk that by the time you pass away, that charity may not still be involved in the project you've mentioned. If you don't name a specific purpose (and most people don't) then the charity will use your money for whatever it identifies as a priority at the time.

6.  It's also possible to use your estate to set up a scholarship in your name. If this interests you, make sure you do some research and put some real thought into the idea. For example, there is no point setting up an annual scholarship for a promising music student at a college with no music program.

7.  You don't have to leave your estate all to one charity. You can name as many as you like, in the proportions you choose.

8.  If you have at least $300,000 to be given to charity, you have the option of going through a foundation. By doing so, the principal amount would be invested for a period of time or forever, and the income from the investment would be distributed to the charities each year. This is often done through a person's will, but can also be started  while the donor is still alive, with the funding coming after the donor has passed away. You would decide on a procedure that would work best for you by talking to an estate planning lawyer or financial planner, who can help you figure out the tax advantages of each method.

Using a foundation is simpler and cheaper than it sounds. It's possible to spend the time and money to establish your own foundation from scratch. A more popular choice is to use a foundation that already exists, such as Scotiabank's Aqueduct Foundation or your local community foundation.

9.  There are tax advantages to leaving your estate to charities. The impact of these advantages on your estate will depend on a dozen different factors, so you should discuss them with your financial planner, lawyer or accountant.

Some links you might want to check out:

Canadian Donor's Guide lists charities by type, name, etc and is a great resource if you are looking for charities that deal with a specific cause or purpose.

Canada Revenue Agency database lists all charities registered in Canada so you can check on their current status.

Aqueduct Foundation

Donating securities: the gift that gives back

This article from the Globe and Mail describes the significant tax advantages to be gained by donating stocks and shares to a charity, instead of cashing in the stocks and donating the cash. Click here to read it.

Although the article doesn't go into estate planning, giving securities rather than cash works with wills as well. You can use your will to instruct your executor to make charitable donations of securities rather than cash, assuming the appropriate securites are still in the estate at the time. It's worth talking about with your estate planner.

Charitable donation tax credit

This article from Canadian Tax Resource Blog describes how to apply a charitable donation to your tax return. It talks about giving through assets other than cash, and how much of a deduction applies (including in the year of death where 100% is deductible). You can see by reading this article some of the ways in which charitable giving ties in with estate planning. And even though this is a tax article, it's easy to read! Click here to read it.

Holiday charity scams

This article from Global Edmonton has several tips to help avoid being scammed by fraudulent fundraisers. Click here to read it.

Tax scheme too good to be true?

I found this article in the Financial Post to be truly interesting, particularly as it reveals the numbers of Canadians who are using (or WERE using) these donation schemes in the hopes of reducing taxes. It's a long article but very well done and informative. Please read the article here if you're thinking of going to a seminar to learn how to use tax shelters.

Forget cash donations, give securities instead

This article from the Financial Post talks about the tax reasons behind giving securities instead of cash to your favourite charity. Click here to read it.

Ensuring charitable pledges are honoured following death

This post from All About Estates talks about why a charitable pledge made by a testator during his or her lifetime might not be honoured, and what can be done with the Will to make sure that it will be honoured. Click here to read it.

Nobel Prizes Were A Planned Gift

Did you know that the world-famous Nobel Prizes were the result of a gift left in a Will? For some great information about Alfred Nobel, his Will and the Nobel Prize, click the link below.

Nobel Prizes Were A Planned Gift

Make 2010 the Year YOU Start Planned Giving

Have you wondered about whether planned charitable giving would be of benefit to you? Have you wondered how to go about it or how to get started? This article from Martignetti Planned Giving Advisors is the fifth of a series of articles about just that. Click on the link below to read the article, and find links to parts one through four of the series as well.

Make 2010 the Year YOU Start Planned Giving

The attached photo is from that article as well.

Who doesn't love wombats?

An American millionaire has left his estate to a Wombat Awareness Organization. Click here to read the story. I wouldn't call them the cutest animals on the planet, but I guess wombats deserve love too.

(image credit: Flickr user Shami Chatterjee)