The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.
Giving while living – an introduction
September 15, 2022 / Insight from Jim Watt, BA (Hons), Senior Wealth Advisor
While inheritance continues to be the primary way wealth is passed on to the next generation, or to support a cause or charity, a growing number of Canadians are looking to gift some or all their assets while they are still alive. This is known as “giving while living”.
Giving while living is gaining momentum as it provides some immediate tax and financial advantages to you and provides you the opportunity to see the good your gifting creates while you are still alive.
When transferring wealth to family members earlier, it can have a more significant impact in the recipient’s life – to help pay for education, a home, build a business, or reach other milestones. The same holds true when making donations to causes or charities, you can see the direct impact of your gift to the work being done.
Giving while living is not just for the very rich. It can be done through several ways: monthly or annual gift, paying off debt or student loans, and other options to ensure a gift will have a significant and positive impact.
Getting started
Step 1) The first step is to have conversations, with your family and with your financial advisor, and put in place a plan with all the required documents to allow you to pursue your gifting goals. These can be short, medium, and long-term goals and identify your plan for the remainder of your own life and for the recipients of your gifts – from family to charities or causes.
Step 2) Following this discussion, you want to ensure that you have all the paperwork and directives in place to carry out your wishes. This includes writing or updating wills, personal directives, and other important financial and personal documents.
Step 3) To ensure you can meet your personal living and philanthropic goals, you may be required to add to or revise your investment and asset allocations as well as make adjustments to other financial tools, like life insurance. This, along with documentation mentioned in Step 2, becomes your estate plan.
Step 4) You may need to do some research on charities or causes you wish to support, to determine the optimum way to gift such as cash, insurance, or investments. You will want to have discussions with your family and financial advisor to ensure that the recipients know and understand how to make the most of the gift.
Step 5) There may also be costs that need to be managed by the beneficiaries, so these early discussions will help to identify and plan for their payment – especially when transferring assets like family property or business assets.
These are the initial steps you can take as you think about your giving plan. In subsequent blog posts, I will talk about some of the key areas of gifting.
Your financial advisor can provide you with more details and information that will help you develop your personal estate plan that will help you make the decisions that are right for you.
