Top Questions for Your Advisor

If you have a professional advisor, such as an estate planning attorney or financial advisor, there is one topic that you probably have never discussed: charitable giving.

Why? First, most advisors are focused on helping you preserve or build your assets - not donate them. Second, many advisors are not familiar with charitable giving techniques and benefits as it is a specialized area of practice. Or, third, you may never have asked.

Here are some questions you may want to ask your advisor. You may be surprised by the answers!

1. Is there a charitable component to my estate plan? If I wanted to leave 20 per cent of my estate in total to one or more charities, how would you recommend that we accomplish this?

2. Will my estate have to pay any taxes when I die? If so, how much do you think they will be? Will making charitable donations help to lessen the amount of tax paid by my estate?

3. What about my tax-deferred retirement plans, such as my RRSP, RRIF and/or LIRA? Do you think there will be anything left in those plans when I'm gone? Since any balance I leave in those plans will be subject to a high level of tax, is it best to leave the residual in these plans to charity?

4. Would it be beneficial for me to contribute some of my highly appreciated, low-income-producing stocks to charity now, as part of my tax planning strategy, so that I could receive increased tax savings during my lifetime and benefit my favourite charities at the same time? Which assets do you recommend?

5. Do you have access to charitable gift planning software to generate some illustrations that will show me the outcomes of different charitable giving strategies?

6. How much paid-up, whole life insurance do I have? Do I still need that much coverage now? Should I consider making a charity the beneficiary to lessen probate taxes on my estate? Would there be any advantage to donating some or all of my life insurance to charity now? If so, what are the benefits and how would I do that?

7. What about my real estate? Aside from my principal residence, I own some real estate that I am not using which has appreciated in recent years and doesn't generate any income for me. Is it possible to give all or some of it to charity - either now or through my Will? For my current residence, would it make sense for me to donate it now to receive a charitable tax receipt but retain the right to live in it for the rest of my life?

8. My children are in my Will but they could use some of their inheritance now for making a down payment on a home or saving for their children's education. I know there is no gift tax in Canada as long as you give the money outright, with no strings attached and the recipient is over the age of majority. Would it be wise to transfer some of my assets to them now? If so, how much would I have left and would I benefit from leaving some of that remainder to charity either now or in my Will?

9. I have some significant assets that I know I won't be spending during my lifetime. I'd like to donate them to my favourite charity now but I really want to continue receiving the income from them for the rest of my life. Is there any way I can do both?

10. Would you be willing to meet or talk with representatives from my charities of choice to discuss my charitable options?