SESSION #3 HOW DO I GIVE? LEAVE A LEGACY EVENT FOR THE NON-PROFIT SECTOR St. Lawrence College 30 May...
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Transcript of SESSION #3 HOW DO I GIVE? LEAVE A LEGACY EVENT FOR THE NON-PROFIT SECTOR St. Lawrence College 30 May...
SESSION #3
HOW DO I GIVE?
LEAVE A LEGACYEVENT FOR THE NON-PROFIT SECTOR
St. Lawrence College30 May 2013
LEAVE A LEGACY
We want to focus on some of the more practical aspects of HOW advisors and our not-for-profit partners talk to their clients/donors about Leaving a Legacy, and charitable giving.
To do that some of us are going to be very FRANK with the language used and we apologize to anyone who finds this approach politically incorrect but this needs to be understood by all
So to begin, we must all accept one assumption….
THE ASSUMPTION IS
EVERYONE IN THIS ROOM IS GOING TO DIE
LAST TIME IT WAS CHECKED, THE DEATH RATE WAS 100%
NOW As we all are agreeing on that point, we can talk about how we move people from giving coins to the Salvation Army at Christmas, to leaving charities money when they die.
Who is involved….the charity and….?
Donor On their ownWith their professional
advisor(s) which could mean their: Accountant Lawyer Stockbroker Insurance Advisor Financial Advisor Financial Planner
SO PLAY NICE …………..
How is money given?
There are many ways to give. Today we will focus on 5 common types of charitable gifts, those made by:
Cash Gifts of publicly listed securities Life Insurance Policies Bequest of Retirement Plans Bequest by Will
How Are Gifts Made?
Gifts of Cash CashCheque Credit CardPre-Authorized
Contributions (PAC), usually paid monthly
Gifts of Cash
Cash gifts are what most Canadians, whatever their age, consider to be charitable giving
Charities like them as the funds can be used immediately and anyone of any age can give
Individuals like them because they get a tax receipt for the full amount and know that their gift will be used immediately
To give you more detail on this, we give you our partner, Tim Brown…..
How Are Gifts Made?
Gifts of Publicly Listed Securities
StocksBondsMutual Fund UnitsSegregated Fund Units*Employee Stock Option
Shares
* Insurance based offering
Gifts of Publicly Listed Securities
For the donor, their gift is put to work immediately and he/she gets a receipt for the current market value of the security. If there are any gains on this holding, there is no capital gains tax
For the charity, there is usually a procedure in place – to get the cash rather than start an investment portfolio and this removes the risk of market fluctuation. Gift can be put to work immediately, funds are available quickly – it is “liquid” and simple to implement.
More details from our partner, Bill Durnford
How Are Gifts Made?
Life Insurance Policy – the charity is named as owner and irrevocable beneficiary
Life Insurance - the charity is named as beneficiary but not owner
Any whole life policy, participating or universal
Term policy (personal)
ANY type of life insurance policy
Gifts of Life Insurance – Charity as Owner
The donor gets a receipt for the cash value of the policy, and any future premiums paid. For the donor, they know that a small current $ outlay, will grow to a much larger future gift
The Charity gets immediate access to the cash value of the insurance policy AND they know that IF the insurance policy is continued and maintained (the donor continues to pay for it), there will be death benefits paid when the donor dies
Gifts of Life Insurance – Charity does not own
The donor has satisfaction when they are alive that they have created a legacy. On death, the estate will get a receipt for the full value of the death benefit. For the donor, they maintain full ownership of the policy………and could change the beneficiary…
The Charity receives monies with the death benefits ….unless the donor changed the beneficiary.
Some examples of this from our partners, Lois Hodgins and Chris Winter
How Are Gifts Made?
Bequest of Retirement Plan Accumulations
Registered Retirement Savings Plans “RRSPs”
Registered Retirement Income Funds “RRIFs”
Bequest of Registered Plans
Donor receives satisfaction now for future gift and continues to have full control over their funds. When the donor dies, the full value of the registered plan is pulled into income, so the charitable gift receipt offsets tax
Charity receives a gift in the future – as long as beneficiary named / bequest is not changed. Often this is a “surprise” gift to the charity.
Some information on this from our partner, Mike Kramer
How Are Gifts Made?
Bequest by Will Within the wording of the will, or as determined by the executor, the Charity could receive: Cash Securities Real Estate Tangible Personal
Property such as artworks, furniture, cars, musical instruments…
Bequest By Will
Donor maintains full control of their property during their lifetime and has the satisfaction of knowing they are “leaving their legacy”. There will be a “donation receipt” that will help with the final estate taxes – especially if the gifts were named stocks with large capital gains which will not be taxed if donated!
Charity expects a future gift as long as the wording of the will doesn’t change
For more information on this, and why there may be delays for the Charities getting their $$, our partners, Paul Clur and Kathryn Wright will provide more information
Source Material
Source: Minton & Somer, Planned Giving For Canadians (Adapted and Revised)
LEAVE A LEGACY and LEAVE A LEGACY Southeastern Ontario sites www.leavealegacy.ca/program/help/resources www.leavealegacyseo.com
Prepared by Leave A Legacy Southeastern Ontario partner,
Kathryn Wright BA, PFP, CFP, EPC, CDFA, CPCA [email protected]
Conclusion
Remember to ASK!