Febbraro said a recent survey of wealth management trends found that 28% of Canadian investors consider charitable giving even more important than it was when the pandemic began – an increase from 20% who believed it did a year ago. However, only 13% of investors are fully prepared for their legacy philanthropic planning. So he urged advisors to raise the issue with their clients – especially since Canada Helps has reported that total donations to Canadian charities, which were unable to hold many of their events during the pandemic, were expected to decrease by 10%. in 2021.
The best place to start is to find out which charities customers are already donating to, what motivates them, or what beliefs they have.
Consultants may also recommend involving the client’s family in estate planning so that partners and children “all know what’s going on and there are no surprises about the family’s wealth,” especially if a client plans to donate by will. Family involvement allows the various members to express their views and values - and maybe even create a family mission statement about charitable giving, so that they define what motivates them, create a family plan, and also manage expectations, especially if some believe that the money earned should instead be kept in the family.
“These types of family gatherings are so important, and they bring families together to make sure there is some level of consistency or finding the common threads that may be there. If not, then at least now the client is aware and knows how to deal with it and I think this is where the financial advisor plays an excellent role as an objective arbitrator to manage this process, ”Febbraro said, noting at that counselor meeting with different parties, then the group.
Consultants are likely aware of the tax credits these donations can bring in. However, they can also assist clients in implementing some other strategies. For example, customers could combine donations over several years for greater tax relief, as unused donations can be carried forward for five years. Customers can also pool their charitable donations with a spouse or partner for a larger tax credit. Or, if they sell a commercial property or a family business, they can exercise stock options to reduce their tax liability. Customers can also donate cash, insurance, or other assets or real estate. By donating publicly traded securities, the charity can liquidate them, eliminating some taxable capital gains and increasing tax benefits.