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Leaving a legacy

It's never too late make a difference.

You may not be Bill Gates, but you'd like to use some of your wealth to help make a difference after you're gone. Other than setting up a foundation or a non-profit, this means gifting a portion of your estate to a registered charity. Here are some ways to leave your money in good hands.

Legacy planning goes beyond estate planning.

While estate planning deals with distributing your assets according to your wishes with an eye to minimizing taxes, legacy planning involves another important element – your family. It's important to ensure everyone is on board with the philosophy behind your philanthropy.

Plans for a legacy should be used as an opportunity to communicate with your family, share your values and clearly explain how you wealth will be divided and why. This allows them to understand your values and desires, accept them and make suggestions themselves. Working together, your family may be able to help shape the future of your legacy and contribute in a meaningful way.

Your financial advisor will be a good source of information in formulating your legacy plan. They have a network of legal professionals and community connections that you can consult and engage in the process.

Options for leaving a legacy.

  • Charitable bequest in your will. This is the most straightforward way to make a gift and ensure it is distributed according to your wishes. Included in the value of your estate, it may increase probate and executor fees.
  • Real estate gift. You can leave property, buildings, land or a home to charity in your will or while you're living. Your estate will receive a tax receipt which can be used to offset final taxes.
  • Life insurance beneficiary. By naming a charitable organization as a beneficiary of your life insurance policy, your estate also avoids taxes on the gift and, if structured properly, from the premiums paid. The organization will receive the proceeds upon your death.
  • Directly designated RRSPs or RRIFs. Naming a charitable organization as a beneficiary of your retirement plan transfers the proceeds directly to the charity, bypassing probate. As well, your estate will receive a charitable tax receipt, which will help counterbalance any tax liabilities.
  • Charitable remainder trusts. You can name a charity as a secondary beneficiary after you and/or your spouse. During your lifetime you'll continue to receive income from the trust and the charity will receive the remainder after your death.
  • Annuity agreement. This is an arrangement you make with the charity where you give them cash or property in exchange for a guaranteed lifetime income (or a pre-defined period of time). Upon your death, they receive the remainder of your original contribution. If you start the annuity when you're between 75 and 90, you can receive the income tax-free; before that (65-74) you can receive a partial tax break.
  • Residual interest. This option enables you to leave the property you live in or other property you own, such as an art collection, to a named charity. You can continue to enjoy the property while you live and receive a tax receipt for the value of the property at the time the gift was made. The charity receives the deed for the property on your death.

Planning your legacy is a process, benefitting from time and professional advice. Your BlueShore Financial advisor and your entire advisory team can help ensure everything is in place, enabling your wealth to live on.