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Planned Giving

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Ryan Smillie

Ryan Smillie

When you are reviewing your will and estate plan you should always review your life insurance options. Whether you are planning on transferring assets to loved ones, charities or a combination of the two, life insurance can provide benefits now and in the future. Life insurance proceeds are given directly to beneficiaries within 30 days of death and are paid tax free to beneficiaries. If you are giving to family or friends insurance can provide a confidential vehicle to transfer assets with zero tax payable to your estate or the beneficiaries. If you are giving to a charity you get to choose whether you receive the tax break for the donations while you are living and paying for the insurance (similar to an RRSP contribution) or later when you pass away and the charity receives the donation. For someone with RRSP’s remaining at death a charitable donation through life insurance can provide the tax relief your estate needs.

For example If someone in BC were to pass away with $150,000 in RRSP’s with their children designated as beneficiaries they would owe approximately $42,546 in taxes on those assets alone https://www.eytaxcalculators.com/en/2020-personal-tax-calculator.html. If that same person were to gift a $100,00 life insurance policy to their favorite charity their estate would receive an approximately $43,652 from the life insurance donation https://www.canada.ca/en/revenue-agency/services/charities-giving/ . If you plan early enough your insurance costs will be far less than the tax benefit your estate will receive.

If you would like to discuss your estate plans or potential estate taxes please contact your advisor and they will put you in contact with one of our insurance specialists.


This information has been prepared by Luft Financial. Opinions expressed in this article are those of Luft Financial only and do not necessarily reflect those of HollisWealth®. Furthermore, this does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors.

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