Create your legacy (Part II)
By Mary Wahbi and Karen Yolevski
In this series of articles presented in four parts, Wahbi and Yolevski will discuss estate planning and charitable giving. The information provided in the series is illustrated with real-life client situations (names changed for confidentiality reasons) as they progress through different life stages. Read Part I
In addition to being an excellent tool for organizing your affairs, estate planning also offers you the ability to create your own charitable legacy. Planned giving is a term used to describe a future charitable donation included in one’s estate plans. Planned giving provides the opportunity for individuals to make a larger gift than would have been possible during their lifetime, make a difference for the beneficiaries of a beloved charity, and leave an important legacy behind. Planned giving also provides significant tax benefits to your estate, meaning your gift goes further for the charity and the other beneficiaries under your will.
There are many motivators behind an individual’s desire to give to charity. It may be an ongoing personal connection or experience with the charitable organization (for example, people often give generously to hospitals or foundations which have helped them or their family members). Others look to support charities which display the greatest need, or smaller charities where a smaller gift may have a bigger impact. Another reason is the desire to create a lasting legacy and obtain recognition for philanthropic reasons for themselves or their family. Often it is a person’s sense of social responsibility, a need to help those that are less fortunate, or the desire to give something back to one’s community that is the catalyst behind planned giving. The generous tax incentives applicable to charitable gifts are another good reason to make charitable gifts.
Whatever the reason behind the gift, there is no doubt that there are compelling benefits attributable to planned giving:
-The personal fulfillment derived from contributing to a cause you believe in, or that is important to you and your family;
-The tax benefits associated with a charitable gift that are acquired now, and later by your state;
-The peace of mind derived from controlling the distribution of your assets, and ensuring your charitable legacy continues after your death;
-The comfort derived from ensuring your financial and family affairs are in order prior to your death; and
-The legacy planned giving creates on behalf of you and your family.
Whether your incentive stems from tax-related benefits, your strong belief in a particular cause, or your personal philanthropic vision, the benefits of planned giving make it easy to understand why philanthropy is a goal of so many people.
An advisor who specializes in estate planning can help you understand these benefits, and help you set up a planned giving strategy that meets your goals and fits your personal circumstances.
As time passed, our clients Anne and Phil become more involved with the charities they cared about most. Anne in particular spent a lot of time volunteering for her favourite charity. At the same time, the family had the good fortune to have an increase in family wealth due to an inheritance from Anne’s mother. Anne and Phil decided to amend their wills to provide a bigger cash legacy to charity both in order to promote philanthropy to their children and to fulfill a personal goal to help a worthy cause in a meaningful way.
There are numerous ways you can reach your philanthropic goals while benefitting you and your estate. Before settling on the type of planned gift you wish to make, it is important to speak to your legal and financial advisors, as well as the charitable organization itself so that a gift can be tailored to your financial and personal situation.
Read Basman Smith Article