Many people at home right now have some time on their hands and some are thinking about updating their wills.  Some don’t have wills at all and for others what they have is outdated.   While we used to do wills in the past, we don’t anymore unless there is some significant philanthropic component.

One of the complexities when doing wills is the very precise requirements for having the will executed “in the presence of two or more attesting witnesses” and also those witnesses cannot be beneficiaries under the will, etc.   In light of the COVID-19 crisis and the need for social distancing, this has made it difficult for lawyers to arrange for the proper execution of the wills with many people at home with their immediate family, who tends to be beneficiaries under the will.   If you have a will but it is not executed exactly according to the requirements it will probably not be valid.

So it was good to hear that the Ontario Ministry of the Attorney General announced last night that an Order has been made under s. 7.0.2 (4) of the Emergency Management and Civil Protection Act that permits Wills and Powers of Attorney in Ontario to be witnessed virtually for the duration of the declaration of emergency as a result of the COVID-19 pandemic.

The Ontario Ministry’s announced the change through a tweet that read:

As a result of this Order, Wills and Powers of Attorney in Ontario can now be witnessed using virtual teleconferencing/videoconferencing software, as long as one of the witnesses is a “licensee” within the meaning of the Law Society Act, which includes lawyers who are licensed to practice law in the Province of Ontario.

Why is this important for charities?

First and foremost charities are in the forefront of health care, social assistance and fight against COVID-19 and the last thing they want is more people being infected.

Second, people leaving funds to charities in their will (sometimes called a “bequest”) are an important source of revenue for the charity sector.

Third, if a person dies without a valid will they have died “intestate” as the Succession Law Reform Act in Ontario sets out how the funds are divided and in most cases, this would not be what most people would necessarily want.   Furthermore, none of the groups benefiting under the intestate provisions will be charities.

We have written lots about bequests and their importance.  Often organizations don’t spend the time and resources to encourage bequests which is unfortunate as bequests tend to have a very low fundraising cost and tend to result in very large gifts.  They also allow middle-class people to make large gifts that they probably could not do during their lifetime.

The challenge for charities will be to remind people that they can leave bequests in their will, that those bequests have tremendous value to charities but to do so in a way that does not come across as insensitive in light of the current conditions.    Right now with tremendous focus on charities and the work that they are doing, and quite an outpouring of support for charities, it may make sense to remind donors if they are doing wills, or redoing wills, of the importance of bequests.

Anyone can leave a bequest.  There are wonderful stories of people leaving very large bequests to charities.  Often those who knew the person did not know they even had that much wealth.   The people who are most likely to leave funds for charities are those who either don’t have children, or their children have a lot already.  As well it is people who have a longstanding relationship with charities – for example, they give an amount every year to the charity – it might not even be a huge amount.  Or people who may have benefited from the services of a charity or seen a loved one benefit from those services.   While some people may leave everything to one or more charities the most common is to leave an amount -say $50,000 to charity.  As well, another common approach is to leave part of the residue of your estate to charity – for example, if you have 3 children who are all doing very well, to leave your estate in 4 equal parts, 3 for your children and 1 part for charities.

Although it is rarely an important consideration, when you die is also a time that some people are taxed and giving funds to charity can offset some of those taxes.

I am not sure if there will be a huge upswing in people doing wills in Ontario – however, it is possible that there will be and if many people are doing wills I would hope that think about the importance of the charity sector and consider leaving a bequest to a charity.  It would be unfortunate if charities were silent and very few of these new wills contained bequests.

I appreciate that for some charities at the moment they are in a dire situation and wondering whether they will around in 2 months, let alone in 20 years to receive a bequest.  However, the charity sector is very diverse and this crisis is having lots of different impacts and certainly many charities are not facing imminent closure.

Here are some articles from the past dealing with bequests:

What is planned giving?

Planned Giving and Professional Advisors – The Why and How to Involve Professional Advisors

Starting a Basic Planned Giving Program for a Canadian Charity –  A Lawyer’s Perspective

Bequests in Canada: 16 Steps to Creating a Planned Giving Program

Why a major gift combined with a bequest to a charity may be more tax effective than just a bequest

Bequests – Avoiding problems with the ultimate planned gift

Bequests in Wills In Canada – Avoiding Legal and Ethical Problems When Supporting Good Causes

For more information on the COVID-19 crisis and its impact on registered charities and non-profit organizations, see our COVID-19 FAQs and check our blog for regular updates.