The Opportunity
Michael and Emily had already saved enough for their own retirement when the sale of a private company brought them an unexpected windfall. Their family values and strong desire to give back to the community created both an opportunity and a challenge. Firstly, how to make the biggest positive impact with their newfound wealth? Secondly, how could they encourage their adult children to be supportive of this decision, despite it affecting their potential inheritance?
The Plan
Before any decisions were made, it was essential to look at the opportunity from multiple angles. Once Michael and Emily had given their investment to charity – there would be no getting it back. Value Partners took them through detailed sensitivity analysis to give them complete confidence that they would have more than enough to fund their current lifestyle through to age 90, even with highly conservative assumptions! Additionally, VPI helped them to proactively engage their kids in the decision making. This process helped ensure that the whole family experienced the profound joy of “giving when you can”, and an adoption of shared values. With these vital steps undertaken, VPI then helped them determine which structure, of the 4 different ways to give to charity, provided the greatest tax advantage and the most flexibility for their family.
The Outcome
With the right guidance and information, Michael and Emily were able to turn the windfall for their family into a windfall for the community. By using the VPI recommended strategy of setting up a donor advised fund, they changed a fear of potential familial resentment into a family that was united in their ambition to affect change in areas of great importance to them. In addition – the tax saved by setting up a donor advised fund meant that virtually all of their new wealth went to deserving charities instead of to CRA. A win for Michael & Emily, for their family, and for their community as a whole