In San Remo Italy, on December 10, 1896 a very successful man, in his last Will and Testament wrote that much of his fortune was to be used to give prizes to those who have done their best for humanity in Chemistry, Literature, Peace, Physics, Physiology or Medicine. His name was - Alfred Nobel.
You've worked hard all your life, scrimped and saved, owned a business perhaps, maybe raised children who have their own lives and perhaps given you beloved grandchildren.
It is natural to think about what will happen to your home, your RRSP's or RRIF's, and other savings, everything you've built up over the years, but facing one's mortality and acting on final decisions may not be top of mind.
It's not easy talking about death and most certainly not our own or our loved ones. This could explain why many of us aren't so keen to engage in meaningful conversations about the type of legacy we'd like to leave and how best to achieve that, while factoring in tax considerations. Often my clients simply say to me, when I initially broach the subject, "everything left will go to the kids"...but will it?
If you are single or a surviving spouse the money you have inside your RRSP's or RRIF will be taxable when you die and, unfortunately, it won't go to the kids! If you die tomorrow and your RRSP's are worth $250,000 at least half will disappear as tax. Are you good with that?
The logical question that comes quickly on the heels of this stark reality is - "what can I do about it?"
In fact there is something you can do that is incredibly meaningful for you, your family and your community and it is called planning a charitable gift.
Have you ever thought about using retirement funds for charitable gifts? Tell me what sorts of issues are important to you, what matters to you, what difference would you like to make in the world?
Canadians can choose charity over taxes if they plan it out in advance; without a plan, there is not choice.
Nobel's story is a powerful reminder of how the legacy we leave can have a profound impact on so many people's lives and the future. Given you have a choice, I ask, which is more important to you; your final tax bill or a charitable gift that can make a difference in the world?
Written by: Betty-Anne Howard, Certified Financial Planner
This article was also published on Carleton University's Giving Insight Planned Giving Newsletter, published here: www.planforgood.ca