Our exchange student Saimi was happy to be with our club and is enjoying the many activities in which she is being included.  She wished all members a Happy New Year.

 

Louise Gardiner is just absolutely delighted that they now have two very active kittens in their home!

Boyd Pendleton, chair of our youth exchange committee was pleased to announce that we have selected our next outbound student – Vladislav Dryscynko, who will be introduced to the club soon.  Our current inbound student Saimi is being kept busy but we are always looking for opportunities for her to join in family events that will expand her understand of life in Canada.  Anyone with upcoming trips or activities that could include Saimi is asked to contact Boyd or Lumi.

 

Rotary Youth Leadership Academy will be available again this year and our club will be sponsoring a student/young adult (ages 15 to 30) to attend.  For more information to to suggest a candidate, contact Tom Mennill.

 

Members were reminded of our Third Special Strategic Planning session, next Monday evening, January 20, beginning at 6:00 p.m. at Memory Gardens.  An invitation has been sent and members are asked to respond (accept or decline).  Members were also reminded that the Member Survey has now gone out and all members are requested and strongly encouraged to complete it.

 

A Five-Club meeting will occur the evening of February 11 at the Granite Club in Waterloo.  The guest speaker will be the Waterloo Region Police Chief – Mark Crowell.  This will be a unique opportunity to here form the chief on local policing and security issues.  The link to register will be sent to all members.

 

Our guest speaker today was Lynn Whetham CFP from Mindful Money Management.  She was introduced by Adrian DeCoo.

 

 

 

 

 

The title of Lynn’s presentation was Wealth: Legacy oi Taxes, Your Choice.  She explained how, through, strategic planning, individuals can reduce taxes and increase funds left for family members and charities.  She stated, “You work hard to make a living.  My work is to help you protect your wealth by protecting your legacy.  I do this by encouraging folks to redirect taxes to charity.”

 

She spoke about three aspects: An Opportunity The Challenge and The Myth.  The opportunity is simply to understand the options available and to make informed decisions.

 

For the challenges there is the Good, the bad and the ugly.

 

First the good:  You have assets that don’t attract income tax.  First, your house.  Neither you nor your estate is taxed on the growth in value of your home.  There are still land transfer taxes and probate to your estate if you own a home when you die but we avoid the big one.  Income tax.  Also, Tax free savings accounts. Those do not attract tax.  You can make withdrawals from your TFSA with no tax consequences and as long as you have a named beneficiary, the Tax free savings account transfers quickly and easily to your named beneficiary without attracting tax.  And Life insurance proceeds are also tax free.

 

Now, the bad news:  We are taxed on the growth of certain investments.  Any real estate other than your principal residence gets taxed on its growth.  This includes your cottage and your rental properties.  This is called a Capital Gains Tax.  The sale of a business also falls into this category.  Any investments like stocks bonds and mutual funds not in a registered account are included here.  Recent changes to the inclusion rate have been in the news. 

 

Capital Gains are the growth in the investment from the time you purchased it until you die or you sell it.  For amounts under $250,000 half of the amount is taxed at your marginal tax rate which in Canada can be as high a 54%.

 

The Ugly involves your RIF and RSP accounts.  The difficult thing to remember sometimes is that we saved tax in the year we put the money into them.  That tax has been deferred but what that means is that it becomes due as soon as you take the money out.  That highest tax rate kicks in at $220,000 of income.  In the year you die, all of the money in your RSP or RIF comes into income.  So if you and your spouse combined have over $220,000 in your RIF’s your income could be pushed into that 54% tax rate.  That is ugly!

 

Now, here is the myth.  Some people believe that leaving money to charity means taking it from their family.  In fact, a gift to charity may increase your gift to your family and she went on to explain and give examples of how this can be done.

 

Since 1995 our government has enacted over 20 pieces of legislation that intentionally encourage charitable giving.  Most significant is the elimination of capital gains on the donation of securities.  For Canadians this legislation offers the opportunity to give more to your family and create a charitable legacy.  But you have to know about this legislation and how to apply it to your situation.

 

In conclusion:   There really are only 3 possible beneficiaries to your estate: Revenue Canada, Your loved ones and your favourite charity.  You get to eliminate one.  YOU CHOOSE.

 

She recommends learning more about these options by taking to your financial advisor specifically about this issue.

 

Members were reminded that a possible charitable organization to consider when considering making charitable donations to reduce taxes are the Rotary Foundation and our own Your Forever Fund.  Traditional fundraising methods are becoming more challenging and less fruitful.  By growing our Your Forever Fund we can counter these effects and possible even reduce or eliminate the need for fundraising activities.

 

Details of upcoming meetings are listed below.