There’s an estate planning gap that widens when the subject of charitable giving comes into play, despite the benefits that philanthropy planning can offer
Mariska Loeppky was surprised at just how few Canadians had a plan for their charitable donations when she saw the results of the 2026 IG Wealth Management estate planning study. This year’s edition of the annual study found that only 29 per cent of Canadians have made plans for charitable giving in their estate in the event of cognitive decline, only 40 per cent have even had a discussion about how charitable gifts might be included in their estate plans. Loeppky, Assistant Vice-President, Tax & Estate Planning at IG Wealth Management, sees this gap in the context of wider planning challenges that Canadians are dealing with. While 84 per cent of Canadians say an estate plan is important, only 41 per cent actually have one.
Loeppky explained that these gaps can occur despite a broad consensus among Canadians that charitable giving and estate plans are important. 68 per cent believe in the importance of addressing charitable giving in their estate plans. She says that these gaps can occur because Canadians don’t have adequate plans or understandings of those plans to address a topic like charitable giving.
“You need a base plan initially that says, ‘all of your needs are going to be met, there’s going to be excess. What would you like to do with that?’ It really depends on the person as well. But I think people don’t really think about charitable giving until they know they have that financial plan that already looks after themselves and maybe their kids,” Loeppky says. “We do see a growing interest in being charitable primarily when they know they’re going to be okay. And until they know that, it’s even hard to pinpoint how much of a gift they’re going to make.”
How retirement risk shapes giving decisions
Retirement comes with a host of uncertainties. Longevity sits first and foremost, along with market risk, sequence of returns risk, inflation risk, and the risk of expensive health issues. Amidst all that uncertainty and risk, it can be hard for someone thinking about retirement to plan for charitable donations, especially while they’re still alive. Plans are the antidote to that risk, Loeppky explains, and when clients have a plan that accounts for all those risks, shows them where they’ll end up in any market environment, and showcases the additional benefits of lifetime charitable giving, there can be space to give in meaningful ways.
From a planning perspective, charitable giving can be a useful tool when clients face major liquidity events. The sale or inheritance of a family cottage, for instance, can come with a host of tax issues given that property’s likely appreciation over the past several years. The sale of a business or an investment property can also prove a useful time to connect with clients about charitable giving. Loeppky explains that even if clients are struggling with decision fatigue after a major liquidity event, talking about a giving plan can be a useful way to deal with a big tax bill and make a positive impact.
While charitable giving has tax benefits, it’s worthwhile to remind clients and advisors not to let the tax tail wag the dog. Loeppky stresses that money given to charity or put in a charitable vehicle like a donor advised fund (DAF) is still a gift, one that still reduces the overall size of the estate. Clients who see that benefit, she says, are the ones who should be encouraged to participate in some kind of a philanthropy plan. From there, the advisor can work with the client family on tools like DAFs, which allow them to plan out their giving. Loeppky notes that in addition to the structured benefits that clients get from a DAF, many charities prefer a consistent annual gift over a single large lump sum.
Why advisors need to play quarterback
For all the benefits that clearly come from including charitable giving in estate plans, the survey still found a significant gap between the importance Canadians place on these plans and the number of Canadians who actually have one. Loeppky says that there is a lack of collaboration between different professionals at work here. Estate planning in general, and philanthropy planning in particular, requires collaboration between advisors, lawyers, and accountants. Loeppky says the “biggest miss” happens when each of those professionals is talking independently to a client and no connection is made. Advisors, she says, can work to set up those connections and play the quarterback role in a plan.
“If you’re the one who’s driving the planning and you’re really helping them with making all those decisions, I think then you’re the trusted advisor,” Loeppky says. “And then when money needs to move… it just secures you as the trusted advisor that can help them with living the life the way that they want.”
