“There is a wisdom of the head and wisdom of the heart.”
Charles Dickens
Page Contents
- 1 Understanding Dickens’ Insight on Wisdom
- 2 About the Author – Charles Dickens
- 3 Connecting Dickens’ Insight to Charitable Estate Planning
- 4 Wealth Allows for Both Family and Charity
- 5 Life Insurance Can Fund Charitable Giving
- 6 Tax Benefits of Charitable Estate Donations
- 7 Scenario: How Life Insurance Supports Charity and Family
- 8 Get Started
Understanding Dickens’ Insight on Wisdom
The quote by famed British author Charles Dickens points to two types of wisdom – intellect and emotion. Dickens suggests that wisdom is not just knowledge but also an understanding from the heart. This perspective supports the idea that true wisdom balances logic and care for others.
Dickens often wrote about poverty, social justice and the need for compassion. This quote captures his belief that wisdom must involve both intelligence and humanity.
About the Author – Charles Dickens
Charles Dickens was born in 1812 in England. Despite his fame, Dickens had a difficult life. At age 12, he was forced to work at a boot-blacking factory because his father was jailed for a debt of £40 and 10 shillings.
The hardship of his youth influenced his writing. Dickens died in 1870 at age 58 from a stroke.
His classic novels like Oliver Twist, A Christmas Carol and David Copperfield criticized poverty and social inequality in 19th century England. Dickens was a philanthropist who used his writing to advocate for children’s rights, education reform and labour conditions.
Connecting Dickens’ Insight to Charitable Estate Planning
Dickens’ quote about head and heart wisdom relates deeply to charitable estate planning. Leaving a gift to charity in one’s Will requires intellect and compassion. There is the practical wisdom of financial planning to create an estate gift. But there is also wisdom of the heart – concern for others that motivates philanthropy. Estate donors have to balance logic and emotion. This reflects Dickens’ view of wisdom.
Wealth Allows for Both Family and Charity
Canadians today have significant wealth to leave as a legacy. In 2019, the median net worth at 45 or older is over $521,100 (source: Statistics Canada as reported by Fideility Canada).
Surveys show the majority of Canadians have no Will or estate plan. Of those with Wills, only a tiny percentage leave charitable bequests.
But with proper estate planning, many Canadians could provide for their family and still donate to charity. Dickens would likely applaud using wealth compassionately to help others.
Life Insurance Can Fund Charitable Giving
Life insurance is a flexible way to create a charitable legacy. Policies can be gifted directly to charities while living. Insurance proceeds passing outside of the estate avoid probate taxes.
Alternatively, insurance on donors can replace assets going to charity. This preserves more wealth for heirs. Life insurance works well for larger estate gifts when spreading gifts over time.
Tax Benefits of Charitable Estate Donations
There are excellent tax reasons to donate through your estate since 100% of the value of gifts to registered charities is exempt from income tax.
For gifts of appreciated stocks, capital gains taxes are eliminated. Donations also reduce taxes for estate beneficiaries. Donors receive tax credits that can be carried forward for up to 5 years.
Scenario: How Life Insurance Supports Charity and Family
John and Jane have a $1,000,000 estate with a $400,000 home and $600,000 investments. In their Wills, they plan to split their estate between family and charity. With proper planning, they could leave the full $1,000,000 to their family and still donate $500,000 to charity using life insurance. Here’s how:
- They get a $500,000 life insurance policy naming the charity as beneficiary. Premiums are a fraction of the payout because they are healthy, and the payout occurs on the second death.
- The charity receives the $500,000 tax-free outside the estate.
- The estate receives a significant tax credit, which leaves more of the estate for family.
Getting life insurance helps John and Jane achieve their charitable goals without reducing their family’s inheritance. The insurance leverages their estate for giving. Dickens would likely praise this practical compassion.
Get Started
Now is the time to start planning your charitable legacy. We’ll help you explore your options, including:
- Charitable bequests in your Will
- Donating life insurance
- Creating a donor-advised fund
- Giving appreciated securities
- Setting up a charitable trust
Let’s have a wise discussion on estate planning that reflects your head and heart. Like Charles Dickens, leave behind a legacy of compassion that helps build a just society.
At Taxevity Insurance, we help Canadians maximize their estate gifts to charity via life insurance and planning. Contact us today to enhance your philanthropy.
Learn how the Will Power campaign helps you include a gift to charity in your Will and about the pros and cons of donating life insurance.
At Taxevity Insurance, we’re passionate about bringing clarity to complex financial decisions. Let us empower you with personalized strategies to achieve your goals. We focus on life and health insurance solutions to protect your business, your family, and your legacy.
