Transcript ESTATE PLANNING

LEAVE A LEGACY
EVENT FOR THE NON-PROFIT SECTOR
St. Lawrence College
30 May 2013
SESSION #3
HOW DO I GIVE?
LEAVE A LEGACY
 We want to focus on some of the more practical
aspects of HOW advisors and our not-for-profit
partners talk to their clients/donors about Leaving a
Legacy, and charitable giving.
 To do that some of us are going to be very FRANK
with the language used and we apologize to anyone
who finds this approach politically incorrect but this
needs to be understood by all
 So to begin, we must all accept one assumption….
THE ASSUMPTION IS
EVERYONE IN THIS ROOM IS GOING TO DIE
LAST TIME IT WAS CHECKED, THE DEATH RATE
WAS 100%
NOW As we all are agreeing on that point, we can talk
about how we move people from giving coins to the
Salvation Army at Christmas, to leaving charities
money when they die.
Who is involved….the charity and….?
 Donor
 On their own
 With their professional
advisor(s) which could mean
their:
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Accountant
Lawyer
Stockbroker
Insurance Advisor
Financial Advisor
Financial Planner
SO PLAY NICE …………..
How is money given?
 There are many ways to give. Today we will focus on
5 common types of charitable gifts, those made by:
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Cash
Gifts of publicly listed securities
Life Insurance Policies
Bequest of Retirement Plans
Bequest by Will
How Are Gifts Made?
 Gifts of Cash
 Cash
 Cheque
 Credit Card
 Pre-Authorized
Contributions (PAC), usually
paid monthly
Gifts of Cash
 Cash gifts are what most Canadians, whatever their
age, consider to be charitable giving
 Charities like them as the funds can be used
immediately and anyone of any age can give
 Individuals like them because they get a tax receipt
for the full amount and know that their gift will be
used immediately
 To give you more detail on this, we give you our
partner, Tim Brown…..
How Are Gifts Made?
 Gifts of Publicly Listed
Securities
 Stocks
 Bonds
 Mutual Fund Units
 Segregated Fund Units*
 Employee Stock Option
Shares
* Insurance based offering
Gifts of Publicly Listed Securities
 For the donor, their gift is put to work immediately
and he/she gets a receipt for the current market value
of the security. If there are any gains on this holding,
there is no capital gains tax
 For the charity, there is usually a procedure in place –
to get the cash rather than start an investment
portfolio and this removes the risk of market
fluctuation. Gift can be put to work immediately, funds
are available quickly – it is “liquid” and simple to
implement.
 More details from our partner, Bill Durnford
How Are Gifts Made?
 Life Insurance Policy – the
charity is named as owner
and irrevocable beneficiary
 Life Insurance - the charity
is named as beneficiary but
not owner
 Any whole life policy,
participating or universal
 Term policy (personal)
 ANY type of life insurance
policy
Gifts of Life Insurance – Charity as Owner
 The donor gets a receipt for the cash value of the
policy, and any future premiums paid. For the donor,
they know that a small current $ outlay, will grow to
a much larger future gift
 The Charity gets immediate access to the cash value
of the insurance policy AND they know that IF the
insurance policy is continued and maintained (the
donor continues to pay for it), there will be death
benefits paid when the donor dies
Gifts of Life Insurance – Charity does not own
 The donor has satisfaction when they are alive that
they have created a legacy. On death, the estate will
get a receipt for the full value of the death benefit.
For the donor, they maintain full ownership of the
policy………and could change the beneficiary…
 The Charity receives monies with the death benefits
….unless the donor changed the beneficiary.
 Some examples of this from our partners, Lois
Hodgins and Chris Winter
How Are Gifts Made?
 Bequest of Retirement Plan
Accumulations
 Registered Retirement
Savings Plans “RRSPs”
 Registered Retirement
Income Funds “RRIFs”
Bequest of Registered Plans
 Donor receives satisfaction now for future gift and
continues to have full control over their funds. When
the donor dies, the full value of the registered plan is
pulled into income, so the charitable gift receipt
offsets tax
 Charity receives a gift in the future – as long as
beneficiary named / bequest is not changed. Often
this is a “surprise” gift to the charity.
 Some information on this from our partner, Mike
Kramer
How Are Gifts Made?
 Bequest by Will
 Within the wording of the
will, or as determined by the
executor, the Charity could
receive:
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Cash
Securities
Real Estate
Tangible Personal Property
such as artworks, furniture,
cars, musical instruments…
Bequest By Will
 Donor maintains full control of their property during their
lifetime and has the satisfaction of knowing they are “leaving
their legacy”. There will be a “donation receipt” that will help
with the final estate taxes – especially if the gifts were named
stocks with large capital gains which will not be taxed if
donated!
 Charity expects a future gift as long as the wording of the will
doesn’t change
 For more information on this, and why there may be delays for
the Charities getting their $$, our partners, Paul Clur and
Kathryn Wright will provide more information
Source Material
 Source: Minton & Somer, Planned Giving For Canadians
(Adapted and Revised)
 LEAVE A LEGACY and LEAVE A LEGACY Southeastern
Ontario sites
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www.leavealegacy.ca/program/help/resources
www.leavealegacyseo.com
 Prepared by Leave A Legacy Southeastern Ontario partner,
Kathryn Wright BA, PFP, CFP, EPC, CDFA, CPCA
[email protected]
Conclusion
Remember to
ASK!