Finance You Get What You Give How to give your money away – the right way Accumulating and building wealth isn’t easy. But giving it away – that’s a piece of cake, right? Just take out your chequebook, sign on the dotted line and that’s that. Right? Well…maybe. Sure, you could take a more spontaneous approach when it comes to giving – and many people do, particularly when the gift is small. But with more substantial gifts, the process of giving can be complex, multi-faceted and fraught with the potential for both financial consequences and emotional pitfalls – not only for you, but for those receiving the gift as well. If your goal is to ensure that the wealth you pass on to your spouse, to your family and to the organizations and causes which you care about actually ends up being used the way you want it to be used (and with a minimum of financial and familial hassles), it makes sense to take a more structured, more strategic approach. Let’s take a look at how you can do that. By James Dolan What are you trying to achieve? What’s the intention of your gift – what change or direct benefit are you looking to bring about with your money? With personal gifts to family, this is often an easy question to answer. But with charities and causes, it often takes a bit of thinking to determine exactly what impact you’re trying to make. What’s the scale? How much do you want to give? And for how long? Are you looking to support an immediate or “emergency” need (disaster relief, for example, or perhaps a child’s mortgage down payment)? Or are you looking to make a multi-year impact on a cause which you care deeply about? If you’re giving to a cause, do you intend for your gift to be used locally, nationally, or even globally? How much do you want to be involved? When it comes to giving, some people simply want to mail in a cheque (or these days, make an e-transfer) and have done with it. Others are looking for more engagement with the people and the causes which they support, or maybe even consultation regarding how the money should be spent. Knowing which approach you prefer will steer you toward specific strategies and options. How will it impact your own finances? Every gift needs to be considered in the context of your own financial situation: you don’t want to give so much that you diminish your lifestyle or derail your ability to cross items off of life’s bucket list. You’ll also want to think about whether your intended gift might limit future gifts – not an issue for smaller, one-time gifts but, for a larger gift, something worth thinking about. Give now or give later? By giving now, you get to see the impact of your gift on the recipient – a highly enjoyable experience for most. In addition, that gift might be better aligned to when your recipient could actually use the help (rather than waiting many years for an inheritance, for example). But giving later might be a better strategy: it can relieve pressure on your own finances, be much less onerous from a tax perspective and, if the gift is structured properly, it can magnify the impact of your giving for many times in the future. Asking yourself these questions will help ensure that your giving is both meaningful and aligned with your broader intentions. Remember: there are no right or wrong answers to any of these questions but, if you’re having trouble answering them, it might be worth consulting with an estate-planning expert or financial professional and talking things through. Defining your giving goals Whether you’re planning a gift to a family member, a close friend in need or a charity that you care about, it makes sense to take a step back and reflect on several key questions. 26 | www.snowbirds.org
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