Legato's My PAR Gift - LEGATO WEALTH MANAGEMENT

LEGATO WEALTH MANAGEMENT

My PAR Gift
Available via Legato.

Generous Donor

An individual or controlling shareholder of a corporation can donate My Par Gift, a life insurance solution by The Canada Life Assurance Company, through licensed agent Legato.

Charity Owned

Any registered charitable organization in Canada can be named as the owner of the My PAR Gift life insurance policy.

Designed For Charitable Giving

The registered charity receives the policy payout upon the death of the insured person.
The estimated payout at life expectancy of a $10k donation:
$23k for Male 70/Female 70 donors,
$35k for Male 60/Female 60 donors,
$70k for Male 50/Female 50 donors,
$110k for Male 40/Female 40 donors.

The Minimum

A single deposit of $10,000 can put a My PAR Gift plan in place with a favourite charity.

Potential Dividends

As policy owner, the charity can decide to take the annual policy dividends in cash to support their current operations and goals or choose to leave the funds in the policy in order to increase the future payout of the My PAR policy.

Financial Flexibility

Over time, each My PAR policy builds up cash value. With guaranteed access to these funds, the charity can access these monies in several ways during the insured person’s lifetime.

The Donation

The single premium deposit qualifies as a charitable donation. Once the donor funds the policy, a notification will be sent by Canada Life to the registered charity to confirm the date on which the policy was placed in-force. The donation receipt will be issued by the charity, not by Canada Life.

A Specific Year to Donate

If the donor needs certainty regarding the tax year of their donation, the donor should make their donation directly to the registered charity during the desired tax year. The charity can then send that premium deposit to Canada Life to fund the My PAR policy. If a donor pays Canada Life directly, the charitable donation receipt can only be issued in the calendar year once the policy has become in-force.

Philanthropic Impact

Give from the hand and the heart.

Making a meaningful, generational difference to charities in British Columbia and across Canada.

Legato's My PAR Gift

Making a single, meaningful to your favourite charity that strengthens their future life never before.

Legato has teamed with advisors and their clients from across Canada on a mission to create significant financial impact on Canadian charities now and for generations ahead.

Learn more from Mark Halpern's Ted Talk on "The New Philanthropy".

No Legacy Planning

A legacy goes to just three places: family, taxes, or charity.

Without planning ahead, the beneficiary list will be limited to just two: family and taxes. Government taxes take the first priority and then the beneficiaries get the remainder of the estate.

Any desire to support the charitable organizations important to members of the family may be limited and likely not possible.

With Legacy Planning

This strategy converts some of those estate taxes into charitable donations by combining the tax benefits of charitable donations with life insurance.

Business owners, incorporated professionals and family offices can adopt this plan within their corporate or family holding company structure, as outlined below, to gain additional tax reductions.

All in all, charitable goals can be realized and dreams can come true without rocking the family boat.

Corporately Owned Legato Impact - donations matched by tax benefits *
$2 corporate donation = $2 tax savings.
* To be confirmed by client's tax advisors.

"That’s amazing. I really like this idea! It’s a win-win-win".
Sukhminder Virk
Lawyer | Soul Counsel | soulcounsel.ca

Legato Impact - Personally Owned*
$2 personal donation = $1 tax savings.

How To Create A Charitable Legacy Plan

Repurpose An Existing Life Insurance Policy
Conversion of a no-longer-needed term life insurance policy creates the fastest way to create this charitable impact plan as a medical evaluation would not be required.

Obtain A New Permanent Insurance Policy
For those donors without a term life insurance policy to convert, a new permanent life insurance plan opens up these same tax benefits and strategic philanthropy opportunities.

The new life insurance policy can be based on the life of a single person or a couple jointly. If one partner has reached a point of no longer being insurable due to medical issues, their philanthropic goals can still be achieved if their partner has good health.

Guidelines from the Canadian Association of Gift Planners (CAGP).
Click on the suitable image below.

Donations totaling $2 million were recently made to Bishop's University and SickKids Foundation when two Toronto-based life insurance advisors had clients with old life insurance policies they wanted to donate to charity.

If you are a life insurance advisor, estate planner, accountant, estate lawyer or investment advisor with suitable clients, lets collaborate so donors in Western Canada can achieve their philanthropic ambitions using these techniques!

CPP Philanthropy™

By reassigning their annual CPP benefit, successful business owners and incorporated professionals make a valuable difference to the local charity/charities important to them now.

The sample case below demonstrates three different approaches that benefit the charities in different ways.

A sample case:
Husband and wife (65) each receive the max. $1,200/monthly in CPP benefits for a total of about $28.800 a year. Living in British Columbia, they could face the top marginal tax rate of 53.5%.

Approach #1: Personally Own The Life Insurance Policy and Save Taxes Later.
Now: Assign those annual CPP benefits to pay the premium of a joint-last-to-die life insurance policy expected to pay out ~$1.6 million at life expectancy.

Future: As named beneficiary, the charity will receive the insurance payout after the death of the second spouse. The charity will then issue a donation receipt for the full amount of $1.6 million which could save the donor's estate over $800,000 in taxes.

Approach #2: Charity-Owned Life Insurance Policy, Save Taxes Now.
Now: Create and plan to fund the same $1.6 million joint-last-to-die life insurance policy but arrange for your charity to be the policy owner and beneficiary of the policy. Donate the annual CPP benefits so the charity can pay the policy premiums. That annual donation receipt of the donated amount eg $28,800 will mitigate the tax payable on that pension benefit.

Future: As both owner and named beneficiary of the life insurance policy, the charity will receive the life insurance payout of ~$1.6M after the death of the second spouse creating a significant, impactful financial support to help that charity achieve future goals.

In this scenario, the donation tax credits have been received by the donor in every year that they've paid the premiums but there is no estate benefit.

Approach #3: Donate RRSP/RRIF Portfolio By Beneficiary Designation.
Now: Donors holding a large RRSP/RRIF account might appreciate this approach that creates a charitable impact while keeping and perhaps improving the estate distribution to their beneficiaries.

An RRSP/RRIF worth $1M could be reduced to as little as $465,000 upon the second death of a couple or the passing of a single person as the entire amount will be taxed in their estate as income (up to 53.5 per cent in British Columbia).

To replace the $460,000 that would have passed to the family in the estate, fund a joint-last-to-die life insurance policy with the CPP benefits annually, and name each of the family members or estate as the beneficiary of that permanent policy.

Future: Upon the second death of the life insured, the $460,000 or more life insurance policy will be distributed tax-free to those named beneficiaries, potentially creating an equal or perhaps greater benefit to each family member.

The charity would receive the $1M+ RRSP/RRIF portfolio as a donation and issue a $1M charitable tax credit that can be used to offset estate taxes, potentially increasing the value of the estate to the beneficiaries.

CPP Philanthropy™ is the trademark of Wealthinsurance.com. We thank Mark Halpern for encouraging us to work together using strategies like this to create a significant charitable impact across Canada.