July is a special month in my family – Bridget and I celebrate our 17th wedding anniversary on July 1st, as well as my Dad’s 76th birthday.  Mom would have been 74 on the 3rd, and I turn 43 on the 5th.  It’s a busy month on the home front for sure!

Last year we celebrated with our family trip to Gros Morne National Park, shown above.  This year, we are going to celebrate in my house by tweaking a few things in our estate plan.  (Exciting, I know, I lead a wild and crazy life!)  I’d like to share a piece of that with you, and talk about the impact of this change.

A few months ago, Bridget and I set up a second-to-die life insurance policy, which will pay out $250,000 upon the death of the second of us.  As you might recall from past articles, that’s when the bulk of tax comes due in most of our estates.  Rather than setting our kids as beneficiaries, we are going to make the beneficiaries our chosen charities.

This policy will ultimately save (based on todays tax rules)  our estate approximately $125,000 in income tax, as the charities will issue our estate a tax receipt for the amount received from the insurance.

Who we are supporting

In our case, there will be 6 charities each receiving a portion of those funds.  Two of these Charities (Amabile Choirs of London & The Clay Arts Centre) are local arts organizations which my wife has belonged to, and which she loves dearly.  Both have provided her with many friendships, much needed stress-relief from her job as a primary school teacher, and lifelong memories.

For my part, I’ve chosen two organizations as well that I have had long standing volunteer commitments to – The Secrets of Radar Museum (I was a co-founder), and The Brain Tumour Foundation of Canada, for whom I have volunteered for over a decade.

Our last two organizations, St. Joseph Hospice, and the Canadian Cancer Society are newer additions to our list.  Our family was extremely grateful to both organizations for the outstanding support our family we received while my mom was dying.

Why are we doing it this way?

A gift of insurance for us, makes sense for a few reasons:

  1. Its cost-effective. For a couple between the ages of 40-70, an insurance strategy is very cost-effective relative to other gifts.
  2. Its fast – unlike gifts made via bequest, the organizations will get their funds within a couple of weeks.
  3. It keeps our estate simpler – we have some complexities in our estate, and this keeps the charitable giving part simple and clean.
  4. We can change our minds easily and with no cost – all it takes to tweak is an updating of the beneficiaries.
  5. It sends a message to our kids about what is important to us.

How about you?

About 84% of Canadians give to charity each year, according to Statistics Canada, but less than 10% of us have thought about leaving something when we are gone.  Bridget and I are pretty excited at making a legacy of transformational gifts when we are gone.  (Well, maybe not so excited about the “when we are gone part”, but moreso about the transformational gift part!)

I know we’ll celebrate extra hard this July, if our gift inspires you to make your own.  Have a wonderful summer!