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Financial Planning Made Easy - Karen Erickson

Charity - the most giving of gifts

Christmas is a time for the exchanging of gifts – and you always do your best to match each of your gifts to each of the people who will be receiving them. At this time of year, you might also be thinking about another kind of giving – charitable giving – to help and support worthy causes you care about. Like your other gifts, you want your philanthropic gift to be the best match for the charity of your choice – and for you. Ideally it will be a gift that helps your charity while minimizing your taxes and other estate fees, and preserving your legacy. Here’s how you can make the most of your charitable giving.

The simplest option: Name a charity as a beneficiary - In your will, simply leave a bequest of money or a gift in kind (such as securities or artwork) to a recognized charity. Your estate will receive a charitable donation receipt that could reduce the income tax on your final return and perhaps the immediately preceding return, as well.

Be a donor: Establish a Donor Advised Fund - You will receive an immediate tax receipt for all contributions made to the fund while retaining the right to advise as to which charities are to receive your fund’s income.

Trust: Establish a Charitable Remainder Trust - This irrevocable trust holds assets such as cash and mutual funds. The interest and dividends are paid to you as taxable income. At the time of your death, the trust assets – known as the ‘remainder’ – go to your designated charity. When you establish the trust, you will receive a donation receipt for the ‘remainder interest’ of the trust.

Insure your giving: Donate a life insurance policy while you live - You will enjoy certain tax credits and your charity will receive the total death benefit under the policy.

Secure your gift: Donate publicly funded stocks or securities - You will get a tax receipt for their full value and will not pay tax on the capital gains of the donated securities.

Give and receive: Establish a Charitable Life Annuity - Set up the annuity for yourself, or for you and your spouse, and receive a lifetime income from the assets. Much of the annuity cash flow is tax-free and you will get a charitable receipt for a portion of the donations based on the amount of annuity income you receive and your life expectancy.

Go private: Establish a Private Foundation - When you make a substantial donation, establishing a foundation allows your name or family’s name to be permanently associated with the cause you’ve chosen.

Give the gift of yourself: Volunteer - Your charity will certainly make good use of your monetary donation – and you, when you choose to take an active role as a volunteer.

 

To give the most and get the most from your charitable gifts, talk to your legal and professional advisor about the best charitable giving plan for you and your charities.

 

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.



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About the Author

As a Regional Director at Investors Group it is my mission to grow the Okanagan Region of Investors Group. I help recruit, train and develop Consultants at Investors Group. I am always looking for professionals that would like to be their own boss and enjoy the training, support, rewards and compensation for being a successful Consultant. Also ensuring that we continue to be involved in the community in which we live.

As a Financial Consultant it is my passion to serve clients by giving them full financial planning advice. This includes investments, insurance, retirement & estate planning and tax reduction strategies.

Connect with me on LinkedIn: http://www.linkedin.com/pub/karen-erickson/15/391/1b6

Click here to visit my website.

Contact Karen by email at:  [email protected]

 




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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.


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