

Legacy and Philanthropic Planning
Legacy Planning
Why Legacy planning is important
Having a solid legacy plan in place not only ensures the protection of your most valuable assets, but it also facilitates a smooth transfer of wealth, reducing the burden on your loved ones during an already difficult time.
Without a legacy plan, your family members may be left to handle your financial affairs at a challenging time. The process of managing these affairs without guidance can be both overwhelming and stressful for them.
One key consideration in legacy planning is the impact of taxes on your assets when you pass away. A well-structured legacy plan typically focuses on minimizing taxes during asset transfer to your beneficiaries. Without such a plan, your loved ones may face additional legal costs and delays in settling your legacy.
Steps for Creating a Legacy Plan
The first step in legacy planning is acknowledging the need for a plan. It's crucial to understand the importance of preparing for the future, and simply having a will may not cover all the necessary aspects.
Start by taking inventory of your assets and liabilities—everything that holds financial value, including bank accounts, property, life insurance policies, and more. This list should be stored securely, with access granted only to trusted individuals.
This inventory will serve as a foundation for your family, providing an overview of your assets and helping them navigate potential tax implications, particularly in the case of assets across different jurisdictions.
Key Elements of Legacy Planning
Legacy planning is not just about drafting a will; it’s part of a larger process that includes several other important steps:
-
Compiling an inventory of your assets and debts.
-
Establishing clear legacy planning goals.
-
Outlining the actions necessary to meet these goals.
-
Consulting with professionals who can help implement your plan.
-
Reviewing and updating your plan periodically.
-
Designating beneficiaries and choosing the right executor for your legacy.
It’s crucial that the executor you choose is capable of managing the legacy’s affairs and ensuring that your wishes are followed after your passing.
Transferring Assets
There are various methods for transferring assets, and the best approach will depend on your personal goals and situation. Consulting with experts will help you determine the most suitable strategies for your unique needs.
Common methods for asset transfer include:
-
Wills
-
Trusts
-
Joint ownership
-
Private investment corporations
-
Direct gifts and inheritances
While a will is the most widely used method of transferring assets, it’s often complemented by one or more of the other approaches listed above.
A customized legacy plan is essential, particularly for individuals with complex assets or family structures. In such cases, a trust can provide more flexibility and potentially greater benefits than a simple will.
Planning for Incapacity
A legacy plan should also account for the possibility of incapacity. If you lose the ability to manage your finances, an enduring power of attorney gives someone you trust the legal authority to handle your affairs.
Without this document, your loved ones may not have the legal right to manage your finances if you become incapacitated.
Addressing the Emotional Aspects
Legacy planning is not just about financial arrangements; it’s also deeply emotional. It’s a way to ensure that your loved ones are cared for, both financially and emotionally, after your passing.
Effective communication is crucial. Discussing your legacy plans with your family can reduce potential conflicts and ensure everyone understands your wishes. Talking about your choices—such as your selection of an executor, guardians for minor children, or how to divide your assets—before making final decisions will contribute to a smoother process for everyone involved.
A legacy plan not only protects your assets but provides peace of mind for you and your family, regardless of what the future holds. Legacy planning is about organizing and structuring your legacy according to your wishes, ensuring that your assets are handled properly when the time comes.
Philanthropic Planning: Creating a Meaningful Legacy
Philanthropic planning is more than charitable giving—it’s a thoughtful approach to supporting causes you care about while aligning your values with your financial and legacy plans. For many Canadians, it’s an opportunity to leave a lasting impact on their community, their family, and the world.
Why Include Philanthropy in Your Financial Plan?
Including philanthropy in your financial strategy can:
-
Support charitable organizations and initiatives that reflect your personal values
-
Teach future generations about generosity and responsible stewardship
-
Provide tax-efficient strategies for giving
-
Help reduce potential taxes and preserve more wealth for your loved ones
Whether your goal is to donate during your lifetime or leave a gift through your legacy, philanthropic planning helps ensure your contributions are meaningful and well-structured.
Ways to Give
There are many ways to structure your giving depending on your goals and financial situation:
-
Outright Gifts: Donate directly to registered charities using cash, publicly traded securities, or personal property.
-
Bequests: Leave a gift in your will to a charitable organization, either as a specific amount, a percentage of your legacy, or a residual gift.
-
Donor-Advised Funds (DAFs): Create a flexible fund that allows you to direct grants to your chosen charities over time.
-
Charitable Life Insurance: Use a life insurance policy to make a large future gift with relatively small annual premiums.
-
Charitable Trusts: Set up a trust that provides income to beneficiaries while ultimately benefiting a charity.
Tax Considerations
Canada’s tax system offers incentives for charitable giving. Donations to registered charities can result in significant tax credits, both during your lifetime and through your legacy. Proper planning ensures that your philanthropic goals are met while maximizing these benefits.
Getting Started
Philanthropic planning is most effective when it’s integrated into your overall financial and legacy strategy. A financial planner can help you:
-
Clarify your giving goals and values
-
Identify tax-smart strategies for charitable donations
-
Incorporate giving into your will or legacy plan
-
Engage your family in legacy conversations
Start building your charitable legacy today. Book a meeting with our team to explore how philanthropic planning can align with your financial goals and values.