Charitable Giving Planning

Charitable Giving Planning .png

5 Strategies for You to Consider for Charitable Giving & Planning.

LifePlan is ready to help individuals who are focused on planned giving through philanthropy, estate planning, and strategic tax planning. As part of an overall estate plan, we can work with clients, their advisors, and their chosen charities to develop a planned gift strategy that meets your philanthropic objectives, maximizes their tax relief, and is of optimal benefit to the charity.

Remember, insurance products can be either part of the gift plan, or a strategic tool to replenish the estate after a significant gift has been made.

Here are 5 Strategies for you to consider for Charitable Giving & Planning.


Strategy 1: Life Insurance Policy Owned Personally – Tax Savings Later

If you have a huge tax liability after you or your spouse death, you can use the life insurance or joint last-to-die life insurance policy to mitigate the taxes liability of your estate, while supporting a charity. For example, if you have a $1 million joint last-to-die policy name the charity, as beneficiary, your named charity will receive the insurance payout on the death of the second spouse. Their estate will receive a donation receipt for $1 million and save the family about $500,000 in taxes.


Strategy 2: Life Insurance Policy Owned By Charity – Tax Savings Now

As above, create a charitable gift of $1 million using joint last-to-die life insurance, this time with the charity as an owner and beneficiary of the policy. Use the CPP benefits or your taxable income to pay the policy premiums and receive an annual charitable donation receipt of your premium payment such as using CPP average of $26,000, mitigating the tax payable on the pension benefit and replacing it with a large gift.


Strategy 3: Donate RRSP/RRIF – By Will Or Beneficiary Designation

If you are not going to use all the money in the RRSP or RRIF during your retirement and have alternative, then you can use your RRSP and RRIF for chartable giving purpose. RRSP and RRIF will be fully taxed as income (at up to 54 per cent in Ontario) on the second death. A $1-million RRSP and RRIF will only be worth approximately $460,000 to their family, after taxes. This strategy designates a charity as beneficiary, which mitigates the RRSP/RRIF taxes.


Strategy 4: Donate Your Stock Portfolio

Finally, if you invest in stocks or securities, consider donating those in addition to or rather than cash. You’ll receive a capital-gains tax break, which can be especially helpful for estate planning, while simultaneously increasing the potential size of your contribution.


Strategy 5: Establish a Private Foundation

For individuals who want to donate assets worth more than $1 million, a foundation can be a good way to donate and keep full control over your dollars. If making a huge donation, you can associate yourself or your family’s name to be associated with the causes you’ve chosen.


Contact our Qualified LifePlan Advisor to Learn More