James and Olivia are a successful married couple in their early 60s, with three children ranging in age from 18 to 23. James is a pediatrician and Olivia is a corporate lawyer. They’re deeply involved in their community and are strong believers in giving back. For the last decade they’ve been supporting a core group of charities through monthly donation programs.

With retirement just a few years away for both of them, James and Olivia want to make sure they can continue to donate to their charities. But they also want to ensure they’ll have enough to retire with comfortably and plan to help their children purchase their own homes in the future.

What we did for James and Olivia

In our first meeting with James and Olivia, they emphasized their commitment to their charities and their desire to help their children financially. Understanding their values and priorities allowed our team to determine how much money they would need to achieve their life goals, and to come up with a financial and philanthropic plan.

Here are some the steps we took as part of this plan:

• We build a Capital Program for the Family to gain clarity on the cost of their desired lifestyle. 

• We modeled a plan based on their expected income and expenses in retirement, and on the lifestyle they told us they’d like to pursue. Since both James and Olivia weren’t sure when they could retire, our plan helped them set a timeline for when they would stop working. This was especially important to James, who has a roster of patients he would need to transfer to another doctor.

• Worked with a trusted tax planning expert, we determined that the most tax-efficient way for James and Olivia to continue supporting their charities was through donations of appreciated shares. We explained to them that donating shares of publicly listed securities – instead of cash – does not trigger a capital gain tax and instead generates a donation tax credit.

• We created a Capital Program™ for them that helped determine their need in today’s dollars to never outlive their savings. This helped clarify their giving capacity without compromising the inheritance they want to leave to their children. 

• To bolster their giving – and give them an added tax advantage – we recommended donating an existing, paid-up life insurance policy to their charity of choice. This would give them a tax deduction for the year they made the donation.

• We also showed them what they could realistically give each of their children (if they choose to) while still ensuring they could retire comfortably.

Next step: An estate plan

With their financial and philanthropic plan in place, the natural next step for James and Olivia will be to document their estate plan. At this point they already have a clear picture of their financial future but will need to consider how they’ll want to divide their estate between their children and the charitable causes that mean so much to them. We are starting Family meetings with the children to walk them through what mom and dad want. James and Olivia want to make sure their kids are taken care of without affecting their drive in career choices. Once again, tax efficiencies remained at the centre of the conversation.