What is planned giving?
Planned giving is a donation strategy that allows people to support the registered charity of their choice with funds from their estate and minimize the tax burden and estate administration fees.
Planned giving can be done several different ways:
- Cash Gifts
- Gifts in kind through stocks and real estate,
- Life insurance proceeds
- RRSP or RRIF proceeds.
What are the benefits of planned giving?
There are two main benefits to planned giving:
1) You can make a meaningful contribution to the charity of your choice; and
2) When done correctly, planned giving can provide your estate with significant tax relief which allows you to leave more money to your loved ones and your favourite charity, while protecting the transfer of valuable assets such as a business or a cottage.
Want to see how it works? Check out this case study*.
Donna and Dave are 55 years old and have two children. Right now, they have $400,000 in registered assets and they donate regularly to charity. When they die, their estate will have a $200,000 tax bill, flowing from the taxes payable on their registered assets. This means they have to choose between leaving money to their children or leaving money to a charity. They simply cannot do both.
Estate Tax Due ($200,000)
Net Estate to Children $200,000
Charitable Donation: $0
But, by purchasing permanent insurance** and naming their favourite registered charity as the beneficiary, everything changes!
Estate tax due ($200,000)
Total insurance premium ($57,667)
Charitable Tax Receipt $200,000
Net Estate to Children $342,333
Insurance Donation to Charity $400,000
*Source: Manulife Financial
**$400,000 face value policy, premiums based on current age
How Do I Get Started?
The best way to set up a planned giving strategy is to get expert advice. A qualified financial advisor will work with you to ensure that your planned giving
- Provides the maximum tax relief possible to your estate and
- Benefits the registered charity of your choice.
What can CG Hylton Inc. do for me?
The advisors at CG Hylton Inc. will help you to put together the best possible planned giving strategy for your personal situation. There is no “one size fits all” solution. We listen to your story, we ask the right questions, and we put together a plan that benefits your estate, your family, and your favorite charity. We will even work with your extended family to ensure that all family members understand the planned giving strategy and that they are as excited about it as you are.