OCEANFRONT BLOG
The Seasons of Planning: Fall as a Time for Philanthropy and Family Legacy
As the leaves begin to change and the air grows crisper, the shift from summer to fall serves as a natural reminder of the importance of planning for different seasons in our lives. Just as we adjust our wardrobes and routines to match the cooler weather, our financial plans also require periodic reassessment to ensure they align with our current needs and long-term goals. One key area of focus for the fall season is philanthropy and family legacy planning—two interconnected aspects that help preserve wealth while fostering lasting values across generations.
Reflecting on Family Legacy
Family legacy planning is about more than just the financial assets you leave behind. It’s an opportunity to impart your values, lessons, and vision for the future to the next generation. Fall is a fitting time to pause and reflect on what legacy you want to build, given the cyclical nature of change and growth. It can be a moment to open conversations with loved ones about their roles in your legacy and how they can uphold the ideals and values most important to you.
A family legacy plan often includes tools like wills, trusts, and estate planning strategies to ensure wealth transfer happens according to your wishes. But more critically, it also addresses non-financial elements, such as family governance and stewardship. For example, you may consider establishing a family charter—a document outlining shared values, traditions, and expectations that can guide future generations as they manage the wealth they inherit.
This fall, consider reviewing your estate plans, ensuring that they reflect not only your financial goals but also the emotional and philosophical legacy you wish to pass on.
The Fall of Giving: Focus on Philanthropy
Philanthropy can be a powerful aspect of legacy planning, allowing you to direct your wealth toward causes you care deeply about. Fall often stirs feelings of gratitude and community as holidays like Thanksgiving approach, making it an ideal season to focus on giving back. Integrating charitable giving into your financial plan allows you to benefit your favorite causes while maximizing tax advantages.
Many people are unaware of the strategic advantages that donor-advised funds (DAFs) offer when it comes to charitable giving. A DAF allows you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants to your favorite charities over time. One of the key benefits is flexibility—funds can grow tax-free within the account, allowing you to support causes at your own pace, whether immediately or over several years. Additionally, donor-advised funds simplify record-keeping by consolidating all your charitable donations into one account, which makes managing your giving much easier. It also provides anonymity if you wish to keep your donations private. If you’re seeking to involve family members, DAFs can offer a platform for them to participate in the giving process, instilling philanthropic values and fostering a shared commitment to giving.
If charitable giving is important to your family, take the time to review your philanthropic goals. Are there new causes you’ve become passionate about? Are there family members who may want to get more involved in these efforts? These are important conversations to have, especially when considering how philanthropy fits into your overall legacy plan.
Year-End Tax Planning
As the year comes to a close, fall is an ideal time to assess your tax situation and make adjustments before December 31. Engaging in year-end tax planning can help reduce your tax burden and improve your overall financial standing. One key strategy is tax-loss selling, where you sell underperforming investments to offset gains realized earlier in the year. This can be particularly advantageous if you’ve experienced significant gains in other parts of your portfolio and are looking for ways to reduce capital gains taxes.
If you anticipate needing funds in the coming year, consider making a Tax-Free Savings Account (TFSA) withdrawal before December 31. Withdrawals made before year-end ensure that the withdrawn amount will be added back to your contribution room at the start of the next calendar year, giving you more flexibility in the future.
Additionally, fall is an excellent time to review your overall asset allocation. By revisiting how your assets are spread across different accounts—like TFSAs, RRSPs, and non-registered accounts—you can optimize your portfolio to take advantage of tax sheltering. Allocating tax-inefficient investments, such as bonds or interest-bearing assets, to tax-advantaged accounts like RRSPs can reduce the overall tax impact of your portfolio.
As fall encourages us to prepare for the colder months ahead, it also invites us to take a thoughtful look at our financial plans. By using this season to review and refresh your plans, you can foster a meaningful connection between your wealth and your values, benefiting both your family and the broader community.
At OceanFront[1], we’re here to help! Contact us today for more information on philanthropic and legacy planning.