Is it time to think about charitable giving?

Some people think about charitable giving routinely. For many others, however, the topic only comes up when something significant happens in their lives.

Here are five key events that can trigger consideration and examination of your charitable legacy:

Family changes

Major family events can get people thinking about giving back. Such events include a death in the family (donating to a hospital or medical research), a child or grandchild graduating from university (creating a scholarship or endowment), or retirement (creating a memorial to a well-loved manager or leader).

Investment gains

In-kind gifts of appreciated securities are one of the most tax-efficient ways to give. For this reason, if one of your low-cost-basis investments realizes a large gain, that’s a good time to consider charitable giving. Before you sell an asset and pay capital gains tax, think about donating it to a charity and getting a deduction for the full fair market value of the securities.

Writing an estate plan

Many people prefer to make charitable gifts while alive—it lets them see the benefits of their gifts in action. But writing the gift into your will also is a viable option. If you’re writing your estate plan (or reviewing it to ensure it remains in sync with your personal circumstances), take a moment to consider your charitable goals, and how they fit into your overall estate plan.

Financial windfall

An unexpected windfall—an inheritance, a business sale, selling a long-held family home, etc.—can be an excellent time to formulate philanthropic plans. Once you determine exactly how much of your windfall you need to accomplish bucket list goals and fund a continued high quality of life, think about what you’d like to set aside for giving back.

Insurance review

An insurance policy can be an exceptionally flexible and cost-effective way to fund a large charitable gift. If you’re thinking about purchasing insurance, you might want to think about assigning a charity as part beneficiary of your policy, or about purchasing another policy to fund your charitable intentions.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.