Most of us don’t need science to tell us that giving makes you feel great, but new research has proven when individuals give money to charities, they get a boost in happiness. On the other hand, the same research shows those who spend on themselves get no such cheery lift.
But there is much more to charitable giving then a cheery lift, in fact, there are significant tax advantages to charitable giving. Many Canadians have begun to realize that you can give and at the same time create a lasting legacy without reducing the estate available to your heirs or jeopardizing your future financial independence.
It’s easy to make regular donations to your favourite charity on an ongoing basis but did you know you can donate your life insurance policy to your favourite charity? A gift of this nature can be much more significant than giving cash every year and there are annual tax benefits for the donor too.
Here are a few key facts about planned giving using your life insurance policy:
• Charities are allowed to be named as beneficiaries under a life insurance policy that is owned by the donor.
• Donors can get annual tax receipts on premiums if they have the charity own the policy and also have the charity as the beneficiary of the policy.
• Donors can get a tax receipt calculated from the death benefit in the year of death if they own the life insurance policy and name the charity as the beneficiary.
• When the donor passes away the life insurance proceeds go to the charity without any delay, probate taxes, or creditor claims.
There are many different ways to structure a planned gift using life insurance and our team of financial experts at Beyond Wealth understand the considerations and requirements needed in order to make such a gift optimal for you and your choice of charity. We can help you successfully navigate the factors like when do you want to receive the tax credit, can you use the full deduction if taken at death, do you want flexibility in naming the charity etc.
Beyond Wealth is here to help you leave a legacy for your family and as many others as possible. Our team understands the details of charitable giving and can help you successfully navigate the fine print and maximize the tax advantages of your giving.
Get in touch with our team here, we’d love to help with your financial plans, dreams and giving.