Q&A with Keith Thomson, a Certified Financial Planner and Managing Director of Stonegate Private Counsel, a division of CI Private Counsel LP, a wholly owned subsidiary of CI Investments.
Charitable giving is an increasingly important component of a financial plan. How do you approach this topic with your clients?
There is little doubt that, for many Canadians, philanthropy is a key component of a well-designed financial plan. I often discuss the concept of “voluntary versus involuntary philanthropy” with our clients. The Webster’s Dictionary definition of a philanthropist is “a benevolent supporter of human beings and human welfare.” But as taxpayers who potentially give up about one-quarter of capital gains and up to roughly half of income to support the general welfare of our country, we could all be considered “involuntary philanthropists.” Of course, if it were not for the taxes we pay, Canada would not be the incredible country we enjoy today. With effective planning, however, we may choose to redirect our involuntary philanthropy, also known as taxes, towards voluntary philanthropy.
What assets should Canadians consider when including a gift in their estate plans?
With effective planning, again, most assets can be used to make a difference through a charitable organization. But it is important to understand that, eventually, your RRSP or RRIF will probably be your most highly taxed asset. These same registered assets can be extremely effective charitable-giving vehicles. For example, the following strategy is easy, involves no administrative cost, does not require changing your will, and can be achieved in three easy steps:
- Request an RRSP/RRIF multiple beneficiary designation form from your plan administrator.
- Complete the form naming your charity or charities of choice as one or more of the beneficiaries.
- Return the form to your plan administrator.
Visit philanthropymatters.ca and click on “The Resource Vault” if you wish to download a sample multiple beneficiary designation form for your reference.
What is the best advice you may provide to someone who is considering including a charitable gift in their estate planning?
First, start today – no more procrastination – and seek out the services of a professional who specializes in philanthropic planning.
Write down the values that are important to you. This is critical, as it will bring clarity to the entire process.
Finally, have a written, integrated plan of action.
This information is provided as a general source of information and should not be considered personal investment or tax advice. Please speak with your investment professional before acting on the information contained herein. The opinions expressed here are those of the writer and may not necessarily reflect those of Stonegate Private Counsel or its subsidiaries and affiliated companies. For more information, visit www.stonegatepc.com.