SESSION #3 HOW DO I GIVE? LEAVE A LEGACY EVENT FOR THE NON-PROFIT SECTOR St. Lawrence College 30 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 own With 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 Cash Cheque Credit Card Pre-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 Stocks Bonds Mutual Fund Units Segregated 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   Prepared by Leave A Legacy Southeastern Ontario partner, Kathryn Wright BA, PFP, CFP, EPC, CDFA, CPCA

Conclusion Remember to ASK!