What if the old adage is wrong, and you can take it with you? After 39 years as a Financial Advisor, I’ve wondered about this assumption, as have many of my clients. Knowledge and experience have taught me that we may not be able to take our money and our possessions with us into the next life, but what we can take is peace of mind, which is a pretty valuable commodity. At the very least, our final steps of this earthly journey can include feeling reassured that we have taken care of our loved ones, and our community, to the fullest extent possible.
Of course, this doesn’t happen by accident. It takes planning. We must put smart strategies in place that allow us to grow a legacy of generosity while simultaneously reducing the tax burden on our loved ones. There are many ways to lessen the tax burden of an estate and one of the simplest and soundest is charitable giving. A particularly tax-smart gift is designating a registered charity-in whole or in part-as the beneficiary of a Registered Savings Plan, an RRSP, RRIF or TFSA. Among the most significant benefits to the donor is the ability to retain ownership of the Registered Account until the time of death, and then giving a much larger gift than might be possible from current assets. Additionally, the resulting tax credit to the estate can be used to offset the deceased’s tax.
Charitable giving is a deeply personal choice-you know the causes that are most meaningful to you. I have served many not-for-profit organizations in Kingston, as a volunteer, and believe the biggest impacts are made locally. Do your research, and then ask your financial advisor for guidance in developing a strategy that brings all the pieces together. As I have said before, unless you like paying more taxes, you should seek advice on how you can make a tax-smart gift now, from your current assets, or down the road, within your estate or will.