Maximize Your Legacy: Eliminate Estate Taxes with a Strategic Charitable Plan

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The ONE Idea: Charitable Estate By-Pass Plan

Did you know that with the right planning, every $2 donated to charity can eliminate $1 in estate tax—turning tax liabilities into lasting impact? With the right planning, estate taxes that would have gone to the government can instead fund charitable causes—while still protecting your family’s wealth.

With a Charitable Estate By-Pass Plan, we help you:

✔ Eliminate estate tax using charitable donations
✔ Protect your wealth so your family receives the full value of your estate
✔ Turn tax dollars into charitable impact—supporting causes that matter to you

How It Works

1️⃣ Use a portion of your estate to purchase a life insurance policy.

• The policy is structured with the charity as the beneficiary.

2️⃣ Upon your passing, the life insurance proceeds are paid directly to the charity.

• This creates a significant donation while simultaneously reducing estate taxes that would have gone to the government.

3️⃣ Your family receives the full estate value, rather than losing a portion to taxation.

• This strategy ensures that your legacy benefits both your loved ones and the causes you care about.

4️⃣ Premiums can be paid through cash, corporate funds, or real estate, with financing options available.

Case Study:

John, 65, has a $50M estate and will be taxed upon death *$10M.

• He invests in a Permanent Life Insurance policy for $20M, paying a monthly premium of $10,000 and makes a charity of his choice the beneficiary.

• If he lives till age 85, he will have paid a total of $2.4M in premiums, in his lifetime

• Upon death, instead of the John’s family having to come up with $10 million of estate tax, it is completely paid off by his charitable receipt of $20M, reducing it to ZERO

  After it all:

  John, got to not only reduce his families $10M estate tax to ZERO, he ALSO got to leave a meaningful legacy gift of $20M to the charity of his choice (for the astronomically low price of $2.4M!)

_{*The Nitty Gritty (feel free to skip): How you get to 10 million dollars in estate taxes upon death?}

1. _{Deemed Disposition:}

   • _{Assume the original purchase price of the assets was $20 million, and their value at the time of death is $50 million.}

   • _{The capital gain would be $30 million ($50 million - $20 million).}

2. _{Capital Gains Tax:}

   • _{The taxable capital gain is 50% of $30 million, which is $15 million.}

   • _{The average combined federal and Ontario capital gains tax rate is approximately 26.76%.}

   • _{The tax owed on the capital gain would be $15 million * 26.76% = $4.014 million.}

3. _{Estate Administration Tax (Probate Fees):}

   • _{Ontario charges an Estate Administration Tax of $15 per $1,000 for estate values over $50,000.}

   • _{For a $50 million estate, the probate fee would be calculated as follows:}

     • _{First $50,000: No tax.}

     • _{Remaining $49,950,000: $49,950,000 / $1,000 * $15 = $749,250.}

4. _{Other Taxes and Fees:}

   • _{Let's assume additional taxes and fees (e.g., income taxes on the deceased's final return, executor fees, legal fees) amount to approximately $5.236 million.}

_{Total Tax Liability:}

• _{Capital Gains Tax: $4.014 million}

• _{Estate Administration Tax: $0.749 million}

• _{Other Taxes and Fees: $5.236 million}

_{Total: $10 million}

Before & After: Charitable Estate By-Pass Plan (GRAPH 1)

✔ RESULT: The family keeps their full inheritance, while the charity receives $20 million—all by redirecting tax dollars instead of paying the government.

Final Thought: Redirect Your Taxes, Empower Your Legacy

Why let taxes diminish your wealth when you can redirect them to support the causes you care about? The Charitable Estate By-Pass Plan allows you to eliminate estate taxes, protect your family’s inheritance, and amplify your charitable impact.

Contact us now to start building a legacy that benefits both your family and your favorite charities!

👉 Let’s talk.

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