When it comes to charitable giving in Canada many people believe, “My estate will handle it. They can have it when I die. What’s the rush now?” Many people are losing the personal and financial benefits gained from charitable giving due to this attitude.
Asher Tward, VP of Estate Planning at TriDelta Financial writes, “The majority of Canadians do not have the knowledge of their financial situation to create enough confidence to donate larger amounts of money while they are still alive. Many would be surprised to know how much they can afford each year! Without a plan for charitable giving while living, it could be financially costing you . You will pay more taxes than necessary, diminish the size of your final estate for your loved ones and give less to charity than you could have. There are many financial and personal benefits of charitable giving now, rather than waiting.”
Financial Benefits
1) Receive an immediate tax credit of roughly 45% or more, depending on the province you live in.
2) Save the tax on the growth of the money that you will never use in your lifetime. By giving it away now you won’t have to pay tax on the future growth.
3) Take advantage of additional tax benefits by the gifting of shares. You don’t have to pay capital gains tax on donations of qualifying shares.
4) Depending on how you donate, you may still benefit from the principal and be able to control the assets, while receiving annual tax benefits.
5) Eliminate paying some probate fees as you no longer own the asset.
Personal Benefits
1) See the impact and benefit of the wealth you have worked so hard to earn and save.
2) Involve and inspire others to do more and participate in giving.
3) Get more involved in things that make you feel good.
4) Derive joy and a feeling of importance from seeing your name associated with a donation.
5) Create a legacy and tradition of philanthropy.
We have a free and easy online tool called the Donation Planner. It shows you how much more you can afford to donate each year, how much taxes you will save, and AFTER these donations, how much your estate will be worth. Try out the Donation Planner so you can be in a position to decide whether you want to give more while you are living.
After trying out the Donation Planner, you may be interested in reading about how to leave a legacy without being wealthy.
