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Planned giving myths debunked


You’ve heard the phrase “planned giving” and you know it is supposed be a tax-wise way of supporting non-profit organizations. But what does it involve exactly? How complicated is it? Is it only for the wealthy? Can you use it to increase how much you donate, even with modest means or limited cash on hand? Can you include a charitable bequest in your will without penalizing your loved ones?

This section is designed to answer these and many other questions about planned giving. It outlines a number of different ways you can support the HEC Montréal Foundation, no matter what your financial situation is or how your estate planning is set up. Read on for tips on making a contribution that suits your needs and lets you optimize your tax savings so you can have a greater impact without it costing you more.


How can I make a planned gift but still retain control of my assets and investments?

There are several ways of donating without giving up control of your assets during your lifetime and minimizing your estate’s tax obligations upon your death.

You can leave a gift to the HEC Montréal Foundation in your will. A bequest can be in the form of property (stocks, a recreational property, etc.), a cash sum, a percentage of your assets or a residual portion of your estate. You will keep control of your assets and continue to be able to use your property throughout your lifetime. In addition, if your personal or financial situation changes later on, you can also change your will at any time. Upon your death, your estate will be issued a receipt to help reduce the amount of tax due. The impact of your gift on your family will therefore be mitigated.

You can also name the HEC Montréal Foundation as a primary or co-beneficiary of your RRSP or RRIF assets upon your death. It is worth noting that retirement funds are among the most heavily taxed assets anyone can own. The tax receipt issued for this type of donation helps to offset this liability. You retain full control over your assets and can change your beneficiary at any time.

You can also name the HEC Montréal Foundation as a primary or co-beneficiary of an existing life insurance policy. You do not have to give up control over the policy and you can change your beneficiary at any time. Upon your death, your estate will be issued a receipt for the value of the death benefit.


Is there a minimum amount for a bequest?

Any donation, whether it benefits the HEC Montréal Foundation right away or somewhere down the road, is greatly appreciated, no matter what the amount. We are grateful for each and every gift, big or small.

Regardless of the size of your estate, you may want to consider leaving a percentage of your assets (say 1%, 2% or 5%) to the Foundation. The impact on your beneficiaries will be minimal, but your generosity will continue to improve the lives of HEC Montréal students for years to come.


I would like to include the HEC Montréal Foundation in my will, but how can I do that and still make sure my spouse will be adequately provided for after my death?

You can make your bequest contingent on the death of your spouse instead of your death so that they can continue to benefit from your assets during their lifetime. You should know that there are mechanisms for transferring property assets between spouses that do not involve any tax consequences. You can therefore leave your entire estate to your spouse tax-free. However, if you do not have a spouse or your spouse predeceases you, the tax burden on your estate can be very heavy, as all assets will be deemed to be disposed of at fair market value. The resulting tax credit applicable to your spouse’s estate upon their death can significantly reduce the corresponding tax liability.

You can also make the HEC Montréal Foundation a contingent beneficiary of your RRSP or RRIF. In the latter case, the income generated by your plan or fund will not go to the Foundation until your spouse is deceased. Upon the death of the surviving spouse, RRSPs and RRIFs cannot be transferred without triggering a significant tax liability. The amount due would be offset by the tax receipt issued for the total amount of the gift.


Will my bequest have a negative impact on what I want to leave to my children and grandchildren?

Without proper estate planning, your estate may be subject to a substantial tax liability upon your death. A bequest to the HEC Montréal Foundation can generate significant tax savings to offset a portion of this liability. As a result, you can make sure your property and your assets will benefit your loved ones and the organizations you choose to support, according to your wishes. Not only will you not be penalizing your children and grandchildren, but your bequest can actually provide tax benefits that help maximize what they receive.

What’s more, by remembering the HEC Montréal Foundation in your will, you will be sharing your values, your hopes and your dreams with your loved ones.


What’s the best way to word my wishes when including the HEC Montréal Foundation in my will?

The HEC Montréal Foundation can provide you with sample wording to help you prepare your bequest.

If you would like, we can also prepare a separate document for you indicating your specific wishes in detail. This is not legally binding and can be modified at any time.

To discuss specific arrangements, please feel free to contact us at your convenience.


Unfortunately, I wrote my will before I knew about the tax benefits of planned giving so it’s too late to include the HEC Montréal Foundation.

Actually, it’s never too late! Your will should be reviewed periodically, especially after a change in your personal life or your financial status. So there’s still lots of time to include a provision concerning the HEC Montréal Foundation. You can also choose to prepare a codicil if you prefer. A codicil is used to indicate changes to an existing will or add new provisions that were not in the original document.


I give to the Foundation every year. I’d like to donate even more, but I don’t have the income or the cash to do so. Is there any other way I can increase my contribution?

If you are insurable, you can use a life insurance policy to donate to the HEC Montréal Foundation. The cost to you would be limited to the amount of the annual premiums.

A gift of a new life insurance policy is a hassle-free and budget-friendly way of making a significant donation based on a set annual amount over a predetermined period of time. This is also an attractive option for members of the same family who wish to make a substantial donation and create a family fund to leave a legacy that reflects their values. You will obtain an annual tax receipt for the total premiums paid. Note, however, that your estate will not be issued a receipt upon your death since you will have already taken advantage of the corresponding tax benefits.

If you already have a life insurance policy and you no longer need the protection it affords, you can donate it to the Foundation rather than cancelling it. After an appraisal, you will be issued a tax receipt for the fair market value of the policy. If the policy is not fully paid for and you continue to pay the premiums, the HEC Montréal Foundation will issue an annual tax receipt for these amounts. Note that your estate will not be entitled to a tax receipt after your death. A gift of an existing life insurance policy can therefore make it possible to make a significant donation at a low or zero cost (if the policy is already fully paid).


What are the benefits of donating securities? Is it complicated to arrange?

When you transfer publicly traded securities (stocks, bonds, mutual fund units or other securities listed on a Canadian, U.S. or international exchange), you will receive a tax credit for the donation and be exempt from any capital gains tax on the donated securities. The resulting tax savings mean that you can make a bigger donation at a smaller cost.

If you have a holding company, you may able to leverage this solution to make your gift even more tax-efficient through the company’s capital dividend account (CDA), which allows it to pay tax-free dividends to its shareholders. Talk to your accountant or financial advisor for more details.

Gifting securities to the HEC Montréal Foundation is easy: it’s simply a matter of filling out a form and contacting your broker to proceed with the transaction.


Can I make a significant donation during my lifetime without affecting what I plan to leave my loved ones?

You can use the tax savings from the credit generated by your donation to take out a life insurance policy that is equal to or greater than the amount of your donation and name a spouse, children, grandchildren or someone else as the beneficiary. That way, you can appreciate the impact of your donation now and, upon your death, your family will receive the non-taxable death benefit, replacing the value of the donated amount.


Can I direct my immediate or planned gift to a specific purpose?

You can direct your donation to a specific area of interest or project at HEC Montréal that is important to you. We would be happy to advise you in this regard.

Whether your gift is made during your lifetime or after you pass away, you can, in accordance with the Foundation’s policies, set up an endowment fund or a long-term fund to leave an enduring legacy. A personalized endowment or non-endowment fund can be named after you, your family or someone else who has played a significant role in your life (parent, mentor, professor, etc.).

Please contact the HEC Montréal Foundation if you wish to learn more about this option.


What happens if the project or area of interest I directed my donation to no longer exists when comes time to honour my bequest or gift of life insurance?

If a donation cannot be used for the purpose you have stipulated and there is no other paperwork (will, codicil, agreement, etc.) drawn up in this regard, the funds may be used for other initiatives, as decided by the Foundation’s board of directors. The board will take your original wishes into account when making this choice.


My bequest or gift of life insurance will be honoured only after my death. Will my donation still be acknowledged during my lifetime?

The HEC Montréal Foundation believes strongly in recognizing every donation we receive, whether it is immediate or deferred (as is the case for a gift of life insurance or a bequest). We have created Club Héritage to acknowledge the contribution of donors who have included the Foundation in their will or insurance policy. So, yes, rest assured we will share our gratitude with you right away!

If you have included the HEC Montréal Foundation in your legacy giving strategy, please send us your will, or the applicable excerpt, for our records. You can also fill out the form “Information confidentielle – Déclaration d’intention – Don testamentaire ” if you prefer. Contact us for a copy of the form. We are committed to recognizing you for your altruism and ensuring your wishes are honoured.


I want to give anonymously. Is this an option?

If you wish to remain anonymous, we will respect your wishes. Some donors prefer total anonymity, while others simply wish to avoid having their name appear on our website, in our annual reports and elsewhere. In the latter case, they may still want to be invited to meetings with the Foundation’s and HEC Montréal’s administrators. We will contact you to determine your desired level of anonymity.

We’re here for you every step of the way!

Badreddine Maamar
HEC Montréal 2007
Director – Major and Planned Gifts, and Assistant Director
Member of CAGP
Member of APFF

514 340-7186

Humeyra A. Karsli
HEC Montréal 2010
Senior Advisor – Philanthropy and International Alumni Relations
Member of AFP

514 340-7735

The HEC Montréal Foundation’s CRA registration number is 118924158 RR0001.

Alumni + Foundation > Give now > Planned giving > Planned giving myths debunked