Twas the Season to be Jolly..and to Give!


The holiday season has drawn to a close and it was indeed a jolly time.

Did you also notice that in the spirit of giving there were a lot of appeals to give back to others while making a difference in someone else's life?

My purpose in writing this article is to encourage all of us to continue engaging in the philanthropic conversation while showing you how easy it is to give back!

Most of us think in terms of the impact we want to have via our donations and our planned giving.

For me, it is important to bring cancer coaching services to my rural community, address the need for disadvantaged students to get access to the arts and support my community in their philanthropic endeavours.

What I'd like to share with you are some observations and recommendations if giving back is part of your overall financial life plan.

#1. Use pre-tax dollars rather than after-tax income to give! This will save you money (more to give back?!) by saving you tax $'s.

What do I mean by that?Most of us tend to use after-tax income dollars to give, which basically means that you are giving back the money that is in your bank account, your income that, in most cases has already been taxed, your net income.We do this because it's easy to do because we simply write out the cheque and we're done.

There is another and better way to do this:If you have investments, mutual funds or stocks, (inside an Open or Non-Registered Portfolio) that have made money, so they are sitting there with a capital gain attached to them, you are much further ahead financially if you donate the stocks or mutual funds – "in kind" – ie as they are, to the charity. That eliminates the capital gain and gives you a tax receipt for that gift. Ultimately you can save thousands of dollars in taxes taking this route.

#2.RRSP Accounts and Beneficiaries


 I find this one of the most often overlooked opportunity for Planned Giving, especially when someone has no spouse to name as the beneficiary and either has no children or adult children.

This is an estate planning opportunity whereby should you fall into the above situation, did you know that when you die, the total, entire amount of $ that is inside your RRSP's will be considered to be income in the year of your death resulting in paying a lot of money in income taxes to CRA.

You have another choice!Inside your Will, you can name your favourite charity or charities the beneficiary of a portion or all of your RRSP's, imagine the impact you could have with that donation! From that donation, your estate will receive a tax credit to offset the income taxes owing.Who do you want as your beneficiary, CRA or your favourite charity?

I am going to stop here, for now, and will provide more ideas and strategies in my next article.

Remember it is essential that you consult with your Financial Life Planner and Lawyer when considering how you want to give back while paying less!#GivemorePayLess #OurPolicyistoGive 



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Tuesday, 23 July 2019

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