Charity And Your Estate
First, we have all heard the phrase ... "You can't take it with you!" As the phrase suggests you should either plan to spend your last dollar the day you die (which is hard to do!) or make an estate plan because there will always be something left for your heirs.
Second ... "You never know when your time is up!" So your estate plan should be developed sooner than later. It can always be modified as time goes on.
Third ... "Death is inevitable. When you pass on you have three choices as to where your estate will go ... your heirs, taxes or charity ... pick two!" Who wouldn't want to minimize the part of their estate that went to taxes?
For all of these reasons, discussing and crafting your estate plan now just makes good sense. But, what does this have to do with charitable giving?
The combination of charitable giving strategies and life insurance strategies can make a powerful difference to your estate plan. Effective planning will significantly reduce what goes to taxes and significantly increase what ultimately goes to your heirs and charity. Few understand, without our guidance, that more can be left to your heirs while also leaving a significant gift to charity. What a perfect combination. The CRA is the only one who will get less.
For example, we recently worked with a couple that was going to have significant capital gains exposure in their estate. They owned securities with significant unrecognized capital gains. These securities were providing dividend income that supported their retirement lifestyle so it wasn't anticipated that they would be sold prior to their passing. The couple also owned a cottage that had grown in value substantially. They dearly wanted to pass the cottage ownership on to their children but didn't want to leave a huge capital gains tax bill, based on the appreciation in the value of the cottage, for their children to fund on their own. Through the judicious use of charitable giving strategies and permanent life insurance we were able to relieve their children of a paying a huge tax bill, provide a significant gift for charity and eliminate the majority of the tax exposure ... a desirable end result.
Many of our clients express philanthropic goals early on in our discussions. Others develop interest when we show them the possibilities. In all cases we encourage the integration of their charitable giving dreams with the creation of their estate plans as the potential for creating significant gifts beyond their expectations can be achieved while also enhancing the potential of their estate for their heirs.
The opportunity is there to be seized. Let us show you the way.
