Articles & Cases

Common Mistakes in drafting legacies and bequests

September 14, 2005

Some common mistakes in dealing with bequests under a will:

1) Inserting the wrong name of the charity.

2) Having a bequest to an organization that is a non-profit but does not have charitable status or has lost its charitable status.

3) Incorrectly drafting or executing the will.

4) Inadequate documentation as to the testamentary capacity of the testator which allows the will and legacy to be easily challenged and potentially set aside.

5) Giving a small residue to a large number of charities – unfortunately this sometimes creates little incentive for any of the charities to ensure that the executor acts appropriately and that the residue makes it to the charity. For example if one has an estate of $150,000 and after debts are paid off there is a $100,000 residue. If that amount is divided amongst 20 charities then each receives $5000. Where the $50,000 in debts legitimate? The difference between $7500 and $5000 is not a large enough difference to motivate any of the individual charities to conduct a thorough investigation. On the other hand if one charity was receiving the whole amount they would have an interest in ensuring the estate was properly handled and that only legitimate debts were paid as the difference is $50,000, not $2500.

6) Giving a large legacy to a small charity that cannot efficiently use the funds – they are then flush with money or giving an endowment to either a small or unsophisticated charity and it is burdensome for them to have to administer. I guess this is a good time to plug the many wonderful community foundations that exist in Canada – they have the expertise to manage funds and the ability to review and monitor how the funds are spent. For a list of Canadian community foundations see http://www.community-fdn.ca/ and for the Toronto Community Foundation visit http://www.tcf.ca/

7) Not checking the gift acceptance policy or objects of a charity and consequently in certain circumstances when certain types of property are being donated or certain restrictions are being imposed the charity decides to decline the gift.

8) Neither advising a charity of your bequest intention or alternatively insuring that your will is kept by a trusted advisor.


If you have any questions about estate planning and including a charity in your will please contact Mark Blumberg at 416-361-1982 or mark@blumbergs.ca