Using an inheritance to make a charitable gift can be a special way to cement a loved one’s legacy and contribute to a meaningful cause.
Over the next two decades, one of the largest generational-wealth transfers will be taking place, as the value of assets passing between the Silent Generation and baby boomers and their Gen X and millennial heirs reaches new heights. Market researchers estimate this transfer will see trillions of dollars pass between generations.
One option a person who receives an inheritance might want to consider is a donation to honour a loved one’s legacy, said Michelle Isaak, a partner at law firm DLA Piper Canada LLP. Doing so would also benefit themselves with a charitable tax receipt.
Another one-time option is a commemorative park bench or tree. In Toronto, a newly installed bench with an engraved metal plaque costs $2,530, and an engraved plaque mounted on an existing bench costs $1,753. To have a plaque installed in a concrete base at the foot of a new or existing tree, the city charges $738. All of these are considered donations to the City of Toronto and are eligible for a charitable tax receipt.
In Vancouver, an existing park bench can be dedicated to a loved one with a plaque for 10 years with a donation of $8,500. The City of Vancouver is also registered with the CRA to accept charitable donations and issue tax receipts.
“A friend of mine whose dad passed, there was a particular place that he loved to hike, and so they paid to have his name put on a bench in North Vancouver,” said Catherine Kim, an estates and trusts lawyer at Boughton Law.
If the inheritance is large enough, an endowment fund is another option for charitable giving, Ms. Kim said. At the University of British Columbia, for example, this type of donation can be made in memory of a loved one and dedicated to a specific faculty, program, award or scholarship.
“What the university does is they typically invest the money, and the money spits out income every year. And it’s the income of the initial gift that creates bursaries,” she said.
The Toronto Public Library Foundation also accepts named endowment funds. The fund must be created with a minimum commitment of $25,000, payable over up to three years. Once established, family or friends can add any amount to it and tax receipts are issued for gifts to the named fund. The library also has a number of existing named funds in place, such as the Rita Cox Endowment Fund, that supports its Rita Cox Black and Caribbean Heritage Collection, which can receive donations from anyone in honour of a loved one.
Whichever charity a gift is being made out to, Ms. Kim recommends researching the organization first to see what their options or preferences are for receiving legacy donations.
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