On a beautiful fall day in Calgary, we stepped into the STARS Air Ambulance hangar. The vibrant red helicopter, poised for immediate action, seemed to hum with purpose. Our guest, the executor of our client’s estate, was visibly moved as our clients, life-long residents of Alberta designated STARS as a major beneficiary in their Will, creating a legacy that will save lives for years to come.

The visit wasn’t just a thank you; it was a demonstration of impact. As we toured the facilities—from the high-fidelity simulator where paramedics train for critical scenarios to the helicopter bay, to the dispatch centre tracking every mission— saw first-hand how our client’s thoughtful planning had transformed into tangible, life-saving capacity. The executor learned that the bequest wasn’t just a single donation; it was a multi-year funding commitment that would help stabilize their operations budget, allowing STARS to invest in next-generation medical equipment and ongoing specialized training.

This experience vividly illustrates the power of a well-structured estate plan, particularly for Canadians looking to support their favourite charities. Through bequests, individuals can extend their philanthropic reach far beyond their lifetime.

The Power of Bequests: Multi-Year Impact

A charitable bequest is a gift made through a will or estate plan. For charities like STARS, these planned gifts are transformative. They often represent a significant, unrestricted source of funding. They move the charity beyond dependence on annual fundraising campaigns, enabling them to:

• Invest in Infrastructure: Fund major capital projects, such as new helicopters or base expansions.
• Ensure Operational Stability: Provide predictable, multi-year funding for critical services.
• Innovate and Research: Support the development of new life-saving medical techniques and technologies.

As a donor, this is particularly important because it means that even from the grave, you are able to ensure that your legacy is having a positive impact.

Key Considerations for Charitable Bequests

For North Americans setting up their Wills and Estates, clarity and precision are paramount to ensure their charitable wishes are fulfilled efficiently and maximize the financial benefits for both the estate and the chosen charity.

There are distinct differences between Canadian and American legislation. Please make sure you seek out the proper advice, especially if you are considering cross-border donations. What follows is from the Canadian perspective. We have created a chart that highlights the different rules on bequests between the two countries. You can find it, along with other K&C resources here.

1. Specifying the Type of Bequest

There are several ways to structure a gift within a Will, each with different implications:

Type of Bequest	Description	Key Advantage
Specific Bequest	A gift of a specific dollar amount or a specific asset (e.g., “$25,000” or “100 shares of XYZ Corp.”).	Predictable and clear for both the estate and the charity.
Residuary Bequest	A gift of all or a percentage of the estate remaining after all debts, taxes, and other specific bequests have been paid.	Allows the charity to benefit from the growth of the estate and ensures personal bequests are covered first.
Contingent Bequest	A gift that takes effect only if a primary beneficiary passes away before the testator (Will-maker).	Acts as a safety net to prevent assets from being distributed according to intestacy laws.

2. Identifying the Charity Correctly

This is arguably the most crucial step. There are three parts to this: 

• Technical: Making sure the organization is operational, and the documentation is legal. Incorrect can lead to funding delays and potentially audits.
• Values and Impact: Is the organization going to achieve the objectives that the funds were intended to achieve? Does the leadership and the operational mandate of the agency align with the values that were established by the donor? Can the executor and/or trustees have a relationship with the agency (if this is important)? If so, what does that look like?
• Off Ramp: A well-crafted Off Ramp allows for the funder to discontinue support. Well crafted funding agreements include an Off Ramp for when an organization ceases to exist, when programs fail to achieve their intended goals, or when community needs change and funding could be better directed elsewhere. A strong relationship between the recipient and the executor or trustees enables them to renegotiate or end the donation, which is essential when defining this condition.

If these three items are not well considered, the executor or advisors may delay the disbursement of funds, create disharmony within the family, waste capital by directing funding where it is least needed, and tarnish the donor’s intended legacy.

• Charity’s Legal Name: Always use the full, registered legal name of the charity, not a common nickname (e.g., “Shock Trauma Air Rescue Service Foundation” instead of just “STARS”).
• Canadian Charitable Registration Number: Include the charity’s unique 9-digit Business Number (BN) assigned by the Canada Revenue Agency (CRA). This number confirms the charity’s status and is essential for tax documentation.

 

3. Understanding the Tax Benefits

One of the most compelling reasons to make a charitable bequest in Canada is the significant tax advantage. Below are just a few of the tax benefits. We recommend that you seek tax advice as every estate is different.

• Donation Tax Credits: Gifts made by bequest will qualify for the charitable tax credit in the year of death.
• Offsetting Final Tax Liability: Donations can be claimed in the final tax return (and the immediately preceding year) to a maximum of 100% of the deceased’s net income in those years. This means a large bequest can potentially eliminate all federal and provincial income tax owing on the final tax return, leaving more assets for remaining beneficiaries.
• Gifting Appreciated Securities: Canadians can significantly reduce their estate’s tax burden by gifting publicly traded securities (stocks, bonds, mutual funds) directly to a charity. When done through a Will, the capital gain realized on these investments is exempt from taxation, while the estate still receives a donation tax receipt for the full market value.
• Timing: You can structure a bequest (e.g., a percentage of the residual estate) and plan timing of transfers to leverage credits.
• Cross-border issues: If a Canadian donor has U.S. estate exposure (for example U.S. assets or dual-citizenship) then understanding the U.S. estate tax / deduction regime becomes relevant.

4. Consulting a Legal Professional

Estate planning is complex, and Canadian laws regarding Wills, trusts, and taxation are specific. Individuals should work closely with a lawyer specializing in Wills and Estates to draft their documents, and a financial planner or accountant to understand the tax implications of their planned giving strategy.

Our client’s story and the lives saved by STARS is a powerful reminder that a legacy isn’t just about the assets you leave behind—it’s about the future you fund. By taking the time to carefully plan a charitable bequest, Canadians can ensure that their values and compassion continue to make an impact, long after they are gone.

Additional resources can be found: You can find all these details on the CRA Charity List. For American readers, this information is also available on the IRS I990 Charity List.