Bequesting Publicly Traded Securities
You may choose to make a bequest of a gift-in-kind of publicly traded securities in your Last Will and Testament. When making a will, your lawyer is your best advisor. Here is some helpful examples of language that might be used in your will that you can highlight and discuss with your lawyer. We hope these examples help but they are not meant to be copy/pasted into a Will and are for illustration purposes only. Most of what you’ll find below may not be new to your lawyer or to you, but it may help you talk about how you’d like to leave a gift of publicly traded securities in your Will.
When you make a bequest to the church or other charity, your estate is eligible to receive a donation receipt for the full value of your bequest. The executor for your estate can then claim a tax credit for up to 100% of the net income on your ﬁnal tax return. Any unused credits can be applied against your previous year’s income, again up to 100% of your net income. This means that you can make a signiﬁcant charitable gift, and your estate and heirs will reap the tax beneﬁts of your generosity.
If you sell publicly traded securities privately, you are taxed on 50% of the capital gains. However, if you gift the securities directly to charity, you pay no tax on the capital gains while also receiving a donation tax receipt for the full market value of the securities. So, you can maximize tax benefits even more by leaving instructions to use any appreciated publicly traded securities in your Estate to give a charitable bequest as a gift-in-kind.
Language for Bequesting Publicly Traded Securities
(These are sample clauses only. Your lawyer or estate planner should review any wording.)
You can specify that all your publicly traded securities be given to charity, which is probably better than listing the securities by name, since you may choose to make changes to your portfolio in the future. However, your lawyer might recommend this alternative: designate a specific dollar amount or a percentage of your estate, to which a gift-in-kind of appreciated securities would be applied first; this will read as more logical to your heirs because of the tax benefits that would accrue to the estate.
Bequest to Your Congregation
The language for a bequest to a specific congregation might read something like this:
“My trustees shall deliver, pay or transfer (a specific amount, percentage, or the residue) of my estate to the (name of congregation(s)/ministry(s)) of The Presbyterian Church in Canada, (address of congregation(s)), or, if such congregation does not exist at the time of my death, to The Presbyterian Church in Canada. To save the Estate capital gains taxes on appreciated securities in my Estate, use my appreciated securities first to make a gift-in-kind donation. The securities may be given through The Presbyterian Church in Canada’s stockbroker, as needed.”
Bequest Where Needed Most
The language for an undesignated bequest to The Presbyterian Church in Canada could read like this:
“My trustees shall deliver, pay or transfer (a specific amount, percentage, or the residue) of my estate to The Presbyterian Church in Canada, Presbyterians Sharing. First use any appreciated securities in my Estate to make a gift-in-kind donation, which will save my estate paying capital gains taxes on the securities.”
Bequest to a Particular Mission or Ministry
A designated bequest should include some language that allows the congregation/church to adjust the designation if circumstances change in the future.
“My trustees shall deliver, pay or transfer (a specific amount, percentage, or residue) of my estate to (full name and address of congregation – or its successor ‐ or The Presbyterian Church in Canada or full legal name of the ministry you want to support), to be used for (list purpose, program, ministry). In the event that circumstances make the specific use of this gift no longer practical or desirable, the Session/Board of (name of the congregation – or its successor ‐ or The Presbyterian Church in Canada or name of the ministry area) is hereby authorized to make changes in its use consonant with the spirit and general interest of the gift. First use any appreciated securities in my Estate to make a gift-in-kind donation, which will save my estate paying capital gains taxes on the securities.”
Whichever wording you use to make a gift-in-kind of publicly traded securities in your will, the recipient congregation(s)/ministry(s) of the Presbyterian Church in Canada will put them to work for the glory and kingdom of God.
The example language provided above is not meant to be used verbatim in your Will and is provided exclusively for illustration and discussion purposes. The information on this page does not constitute legal or professional advice and should not be substituted for appropriate professional advice. The Presbyterian Church in Canada strongly recommends that you seek professional legal and financial advice to ensure your financial situation and those of your dependents are considered; that your tax situation is reviewed; and that your legacy gift is tailored to your circumstances.