The Legacy Protection Plan

The Legacy Protection Plan is simply a combination of Charitable Life Insurance and RRSP/RRIF Gifting strategies. When we talk with families about their intentions of charitable giving in the future, they also have a need or desire to not only leave assets to a charity, but to leave assets behind to family members.

By using a formula to determine what your future tax obligations will be, we can analyze your situation and maximize the value your estate leaves behind for your family and at the same time, fully maximizing the benefits to your charity.

In its simplest form your family buys a life insurance policy to cover the value of your future RRIF. Upon your passing, your family receives the Tax Free Life Insurance policy, the Charity receives the Tax Free residual value of your RRSP/RRIF, and the Tax Man receives nothing. It is the perfect way to maximize the efficiency of your money, over your life, and through to the next generation.

It is incredibly affordable for a family to implement, and by making small adjustments to your plan, you are able to give more than you ever believed possible. All of this is done in a completely private manner, through named beneficiaries, not through the Will, so all of your wishes are yours, and not public knowledge.

All of these situations are unique and are based upon the donor, and need to be discussed further to maximize the value and benefit to all.

A story about how this works;

Bob and Mary in their 60’s, retired and loving it!

Bob and Mary have always worked hard in their lives, Mary as a school teacher, and Bob worked for the local steel company as an electrician. Both of them have received a pension from their employers, but over time they also put a few thousand dollars into their own RRSP’s every year as well, just to provide some peace of mind in retirement.

Although they don’t need to touch the RRSP’s, they also understand that every year they continue to grow, they continue to increase the tax obligations in the future. Both Bob and Mary’s pensions have survivor benefits on them, so even when one spouse dies, the other will continue to receive some monies from their pensions for as long as they live. Their respectable home is paid for, and they have no need or desire to move. They have three children together, all of them married and at least as successful as Bob and Mary in their minds.

They have savings accounts and some monies in GIC’s as well. They like the thought of simply naming the charity as the beneficiaries of their RRSP residual, that way they can have control over where their money goes, as opposed to trusting the tax department to do as much good with it as their charity could!

But they still had a desire to leave something behind for their children, and grandchildren as well. They knew that the RRSP/RRIF's were going to be the highest taxed asset they would own at the time of death. So they decided on using a Life Insurance policy today, to replace the assets of the RRIF in the future. For pennies on the dollar, they can make a huge difference by doing something today, as opposed to waiting until it may be too late. This way they could give the Tax Free Life Insurance, Residual value of the bank accounts, GIC’s and the value of their home to their children, and give the highest tax vehicle (RRIF) to the charity, which pays no tax.

It really seemed so simple to Bob and Mary, and it didn’t take any more than a simple plan, but in the end will make a world of a difference to their charity, and give them peace of mind, that only what they don’tuse will be given to their charity allowing them to have peace of mind while they are alive.

Please call our office today to see how we may help you, Leave a Lasting Legacy...