Your Guide to Creating a Tax-Efficient Legacy

Think legacy planning is only for the wealthy? Think again.

Legacy planning isn’t about building hospital wings or naming stadiums after yourself. It’s about having your ducks lined up, organizing things, and making life easier for the people you care about when you’re gone.

Canadian legacy planning can be as simple as having a current will, naming beneficiaries properly, and leaving clear instructions for your loved ones. Just these basic steps can save your family stress and confusion during an already difficult time.

Whether it’s funding park benches where your kids grew up or setting up a small scholarship fund, meaningful legacies don’t require massive estates—just planning and intention.

Ready to create a legacy that reflects your heart and values? Listen to the full episode to discover the three simple “buckets” that make legacy planning actually doable, plus real examples and tax benefits you need to know here

Show Notes: Your Guide to Creating a Tax-Efficient Legacy

Hey there, welcome back! Today I want to talk about legacy planning. You might think legacy planning is only for the wealthy, that it’s complicated. It kind of sounds like something only rich people do, but it’s not. It can be as simple as leaving clear instructions, showing your loved ones you care, and making sure your wishes are followed.

To me, that is legacy planning—not building a wing at the hospital or naming a stadium after someone. I mean, that would be great, but probably not realistic. To me, legacy just means having all my ducks lined up, organizing and making things clear and simple for when I die. You might want to include some legacy planning, maybe as a gift, or adding a bench along your favorite walking path—something memorable—or leaving a beautiful letter to your loved ones. It’s all of those things.

This episode will help you understand what legacy really means, why it matters, and how you can create one that reflects your heart and values without getting overwhelmed by the details.

What Is Important to You?

So let’s start here. I’m going to ask this question: What is important to you? When I sit down with clients, this is always the first question. Remember, legacy planning sounds complicated, but it doesn’t have to be. When we ask what is important to you, often family and loved ones come up. We want to make sure they’re going to be okay. We want to make sure that they don’t have to stress too much with taking care of things when we pass.

So by starting there, it’s going to help guide that conversation of what you want to plan as a legacy. Remember, like I said, it can be simple—something as simple as making sure you have a current will, naming your beneficiaries properly, and making the transition easier for your loved ones. Yeah, just having these basic things in place can save your family a lot of stress and confusion later. And to me, when I think of legacy, that’s what I want for my legacy—that I took care of everything and made everything easy.

And in the back of my head, I think it’s so that they can grieve, because there’s probably going to be a few sad people when the time comes. And so that’s part of that legacy. What’s important to you? It’s really about clarity—the people and causes you care about—and it’s about looking after things the way that you want.

Knowing what’s important to you means: How do you want to be remembered? Who’s important to you? And then you might have a cause—maybe there’s a charity, maybe a group or a church or something else different that’s important to you, or something else important that has shaped your life. And knowing what that is is your first step of legacy planning

The Three Buckets of Legacy

Okay, so I love buckets—you know that about me. And so the word legacy means different things to different people. I’ve got some buckets for it. It’s not just money. Let me be clear about that. Legacy for some—so leaving a legacy means having a will with clear instructions, or maybe writing out that final letter to share your thoughts and say goodbye.

Now it could be—now we’re going to have some financial legacy, some things that we need to take care of, and that could be your money, property, investments. And so this is where I like to put them into buckets. I like three buckets. It kind of feels less overwhelming to me when I put it into that. So I’ll share with you:

Bucket One: Giving While You’re Alive This is giving you can see in action. You might donate to charity, help a family member with a gift of money, or support a community project. Many people feel joy seeing the impact while they’re here and alive.

Bucket Number Two: Gifts Through Your Will This is where your will or your estate instructions come in after you die. Now, this is where you can leave money, property, or personal items to people and causes that you care about. You can also write a final message to explain your wishes. This is where I love a legacy letter.

And then the Third Bucket: Creating Something That Lasts This is building a legacy that continues beyond your lifetime. So you can think about maybe creating a scholarship fund, setting up a trust that pays out over time, or starting a foundation. We have donor-advised funds, and so that’s just another step.

Breaking it into these buckets helps you see that you don’t have to do everything at once or pick just one way to give.

Tax Benefits of Legacy Planning

There are, of course, some tax benefits to legacy planning, which the nerdy part of me just absolutely loves. So let’s look at some of those ways that you can leave a legacy and some tax benefits come your way with it.

Direct Donations to Registered Charities So you can donate while alive, or when you pass, you can donate through your will. In both cases, you get a charitable donation tax credit that helps lower taxes. If your estate donates after you pass, your estate can claim the credit to reduce taxes owing.

Gifting Publicly Traded Stocks or Securities If you own shares that have gone up in value, donating them directly to the charity means you don’t have to pay capital gains on that increase, plus you get a donation credit. So that’s a win.

Naming a Charity as a Beneficiary on a Life Insurance Policy You can take out a policy or change an existing one that you have. And so that’s actually common. So when the need for insurance is no longer there, but there are still policies in place, this is where someone generally will then change the beneficiary to be a charity. And that means that charity receives the proceeds. Your estate then gets a tax credit for the amount, which can help offset other taxes.

Setting Up a Donor-Advised Fund This lets you get tax receipts right away, but then you recommend which charities will receive the money over time. Something like this could be an example of where you put a chunk of change into a strategic charitable giving fund, and then every year you can pick what charities you want to receive maybe the interest or the dividends that it’s made.

Creating a Trust or a Foundation This is a little bit more formal and a little bit more complicated, but it does help you create something that lasts for generations.

So the nerdy self here—in my tax heaven. So here are some of those tax benefits: When you give while you’re alive, you personally claim the tax credits. That’s a win. And when your estate gives—so that means that in your will, you’re giving to charity—the estate can then claim the credits on your final return to help reduce taxes when you’re dead.

So planning ahead with your financial planner and tax professional obviously gives you the most benefit while making sure your gifts are handled exactly how you want. And then that’s where we come back and we say, what is truly important to you? Once you answer that, then we can fill in: Okay, how do we execute this? How do you want to do the things that you want to do?

Real Examples

So I’ll share with you—I actually have two very quick, small examples and closing thoughts here before I wrap it up.

Example One: One of my clients loved the local park where her kids grew up, so she decided to help fund new benches and trees. It was not a million-dollar gift. It was very affordable, but it left a visible impact on our community. And so after she passed away—this had been planned many, many years ago—and it was a really thoughtful gift. So that’s leaving a legacy right there. Not expensive, simple, but well thought out.

Another Client: Set up a scholarship fund at the sports school. It didn’t take a huge estate to make it happen—just some planning and intention. And so you’ve got all these different avenues you can use.

Closing Thoughts

Remember, creating a legacy doesn’t have to be complicated or reserved for just the wealthy. It’s about knowing what matters to you, taking a few simple steps, and making sure that your loved ones and anything that’s important to you—things you care about—are supported the way you want.

If you are thinking about your own legacy and want help understanding your options, or you’d like to make a plan that feels right for you, reach out anytime.

Thanks for listening. Take care. Talk soon.