Donate securities to charity (and be a bit of a tax Scrooge)

You may have heard that there are tax advantages to giving to charity, particularly if you want to give shares and securities, but do you really understand how it works? Do you know whether it might work for you? I'm attaching a link to an excellent article in the Globe and Mail by Tim Cestnick that really explains it well. Click here to read it. Although the article talks about charitable giving while you're alive, the same tax principles apply to giving to charities through your will.

An entrepreneur's guide to giving wealth away

I always like finding articles that can talk about tax in plain language. The attached is one of those, and author Tim Cestnick does a great job explaining how owners of small businesses can get tax breaks both in their lifetimes and at the time of their deaths. Click here to read the article from the Globe and Mail.

Talk to the kids before leaving them your cottage

I sometimes wonder whether my constant warnings to parents not to leave their cottage to ALL of their children are falling on deaf ears. I worry about the families who have taken that step. I was pleased to see a new article by Tim Cestnick of the Globe and Mail that gives some excellent, practical advice to parents who are considering dealing with their cottage this way. Click here to read the article.

Why you should think twice about joint ownership

I've often posted articles of my own and from other sources about joint ownership. The bottom line is that people use joint ownership as a type of home-grown estate planning, not realizing that they are creating a disaster. I've got some support for this point of view from the Globe and Mail's Tim Cestnick. Click here to read this article in today's Globe.

Beware the tax traps when passing assets to family

This link goes to an article in the Globe and Mail in which Tim Cestnick talks about parents transferring assets to children, and particularly the issue of selling the children the assets at less than fair market value. I know a lot of parents want to do this, because they suggest it in our planning meetings. They think they are doing their kids a favour by selling something to them at what the kids can afford, rather than what the asset is really worth. They usually change their minds once they find out about the tax consequences to them and to the kids.

Tax information isn't always readable, but this article is. Click here to read it. And I echo Mr. Cestnick's closing tip about getting professional advice. When you're dealing with potential tax bills of tens of thousands, or even hundreds of thousands of dollars, for heaven's sake spring a couple hundred dollars to talk it over with an accountant or tax lawyer.

Planning is not a one-size-fits-all proposition

In this article from the Globe and Mail, Tim Cestnick talks about the fact that tax planning is not a one-size-fits-all proposition. Some people value simplicity more than tax savings, for example. I agree with his message, especially since it echoes my approach to estate planning. Not everyone is the same. Not everyone feels the same way about things.

The key for lawyers and other planners is to let the clients talk. Let them tell you what is top of mind for them. I tend to ask my clients questions such as "what's your biggest worry about your children when you pass away?" or "ideally, what would you like to see happen with your business?" These open-ended questions net me revealing information about family dynamics, past problems, and family values. I can then drill down to get the additional facts I need.

This kind of discussion also tends to make a client understand his or her own values better. Though the client might have come to see me to get "a Will", the client leaves with peace of mind and a workable plan for the future.

It seems to me that Mr. Cestnick agrees with my belief that planning - whether tax planning or estate planning - is about individual people, not about money.