Estate Planning:
The Feeney Philosophy of “Giving While Living”
Chuck Feeney is the philanthropist who pioneered the idea of “Giving While Living.” While he amassed an $8 billion fortune as the founder of airport duty-free retail, he’s more prominently known for his way of living, which has centred around the belief that since you can’t take it with you, why not give it away?
Last year, at the age of 89, he formally dissolved his giving foundation after fully distributing his wealth, declaring from a small rented apartment: “To those wondering about giving while living: try it, you’ll like it.”
Many of us think of estate planning as preparing for what happens after death, but giving while living can play a complementary role. While the obvious personal benefit is the satisfaction of seeing your gift at work, consider that there may be other benefits. including financial ones, from giving while alive:
If you’d like to schedule an appointment with me or my team, please contact us at 778 655 2410 or use the chat feature or contact form in the footer below.
Reducing the family’s “overall” tax bill
If adult (grand) children are in a lower tax bracket than you, there may be tax benefits from transferring investable assets to them. Any annual investment income will be taxed at their lower marginal tax rate instead of at your higher marginal rate. This may reduce an overall lifetime family tax bill. Be aware that gifts to spouses or minors may result in negative tax consequences as any income generated from gifted property or capital gains from gifts to a spouse can be attributed back to you.
Simplifying or reducing your future estate
By gifting assets during your lifetime, may reduce the size of your estate and thus the burden of managing assets by others later, especially as it relates to real estate or other investments. This may also reduce capital gains taxes at death, as well as probate/estate administration taxes in provinces where applicable.
Maximizing lifetime charitable donation credits
You may receive greater tax benefits by making charitable gifts annually and over time to enable the use of charitable donation credits to reduce your tax liability, as opposed to having a large donation credit at death which may not be fully utilized.
Potentially reducing future estate conflict
If you wish to distribute your estate in a manner in which some beneficiaries will receive a greater proportion, gifting during your lifetime may help to potentially avoid a situation in which a dissatisfied family member disputes your will.
Other Options to Consider
There may be other ways to pass along assets while living. One consideration may be contributing to a Registered Education Savings Plan for the benefit of (grand)kids. If the child has reached the age of majority, funds may be gifted to be put in their Tax-Free Savings Account.
Keep in mind that, as with any gifts it gas been given, you have relinquished control. If you wish to maintain control there may be other vehicles, such as a trust, that can be viable alternatives to a gift. Also, careful planning will ensure that you continue to have sufficient funds for your own retirement. As always, we recommend seeking advice from legal and tax professionals regarding your particular situation.
If you’d like to schedule an appointment with me or my team, please contact us at 778 655 2410 or use the chat feature or contact form in the footer below.
To read more about Feeney’s remarkable life click here.
If you’d like to schedule an appointment with me or my team, please contact us at 778 655 2410 or use the chat feature or contact form in the footer below.
I look forward to connecting with you again soon.
Sincerely,
Maili Wong, CFA, CFP, FEA
Senior Portfolio Manager
Executive Vice-President
If you have any questions about how this relates to you or your investment portfolio and financial plan, please give us a call at 778 655 2410 or email us at thewonggroup@wprivate.ca
