Good To Know – Financial Life Planning Tips from Betty-Anne Howard, Athena Wealth and Legacy Planning

Should I donate money to charity now or at my death?

 Recently, when sharing information in a presentation at the Legion in Almonte on Tax Reduction and Estate Tax Elimination, I was asked a brilliant question, the answer to which wasn’t simple or easy.

 Connie, who posed the question, made it clear she wasn’t happy or satisfied with my answer, which was great feedback! She asked; “If I have $10,000 to give to charity, am I better off giving it to charity now, or when I am gone?”

 My response was…it depends on what you’re wanting to achieve! I told her it was difficult to answer a question like that without knowing her tax situation. Connie and her husband Don booked a follow-up meeting with Tara and me, and we then had the opportunity to learn more about their situation and answer the question more fully. Connie was particularly helpful in steering us towards great ways to answer that question that wouldn’t necessarily depend on knowing exactly what the tax situation is.

 So, thanks to Connie, here are some answers to the question, “Should I donate money to charity now or at my death”?

 #1. First, it’s important to understand that there are many different factors that need to be considered when deciding to give now or at your death, and each situation is unique. 

 #2. Second, even though it is not a simple answer, there are several things you can consider that may help you in making the decision. Here are some questions to ask yourself:

  • Do I want to see the benefits of my donation while I am alive?
  • How much can I safely donate now? This requires a determination of how much income you need to maintain your current lifestyle either with your partner or alone.
  • What are my survivor benefits and entitlements, and what will be the tax liability of the final spouse? When calculating this, you will need to determine which assets trigger taxes, and also if there are mechanisms/strategies to redirect those dollars to charity instead of after-death taxes. 

 It’s these last two questions that ensure a win-win for charities and families. You start to see the benefits of answering these questions after the calculations are done. It also helps to clarify how one can win (i.e. the charity) and the other (family) not lose.

 I hope this has helped clarify some of the considerations around donating to charity, and if you would like to sit down with us just like Connie and Don, to discuss your own situation, please do get in touch!

 Till next time

Betty-Anne Howard / Athena Wealth and Legacy Solutions

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