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“The Luckiest 1%”: Warren Buffett on Sharing Your Blessings

Category 3: Donate gifts

“If you are in the luckiest one percent of humanity, you owe it to the rest of humanity to think about the other ninety-nine percent.”

Warren Buffett

This quote from renowned investor Warren Buffett argues that being born into privilege or attaining material success comes with a moral responsibility to look out for the broader community and make the world better for everyone.

While some may interpret the quote as anti-capitalist, Buffett advocates for compassion and urges the wealthy to harness their resources for the greater good. 

About Warren Buffett

Warren Edward Buffett was born on August 30, 1930 in Omaha, Nebraska. Buffett demonstrated keen business instincts from a young age, purchasing his first stock at age 11 and filing his first tax return at age 14. He created the diversified holding company Berkshire Hathaway and became one of the most successful investors of our time. 

Now 92 years old, Buffett has pledged to give away 99% of his wealth. He wants to equip the next generation with the tools to build a better future. Though Buffett still oversees Berkshire Hathaway, he focuses much of his time on philanthropy.

Connecting the Quote to Philanthropy

Warren Buffett’s call to action for the wealthy to consider the disadvantaged has profound implications for charitable estate planning. With net worth rising, Canadians have an unprecedented capacity to do good through their Wills and estates. Even minor tweaks to your plan can make a big difference.

Besides providing for your loved ones, you have an opportunity to better your community and the causes you care about. Building charity into your estate plan is a values-based action that allows you to create a lasting legacy of generosity.

When updating your Will or life insurance, consider adding charitable beneficiaries. Leaving even a modest 1-2% of your estate to charity can be transformative.

Practical Strategies to Leave a Charitable Legacy

If you feel moved to include charitable giving in your estate plans, there are several practical strategies:

  • Bequest in Your Will – Make a legacy gift to one or more charities by allocating a dollar amount or a percentage of your estate in your Will.
  • Donate appreciated securities, real estate or other assets: Donating these assets to charity lets you avoid the capital gains tax that would otherwise apply if you sold them. This increases the value of your gift without using life insurance.
  • Beneficiary of Retirement Accounts – Name a charity as your RRSP or RRIF beneficiary. This is tax efficient since your registered funds face high taxes before going to your heirs.
  • Beneficiary of Life Insurance – Make a charity the beneficiary of a life insurance policy. The policy could be new or one you already have. You could also make the charity the policyowner. There are tax benefits for each of these options. Your unique circumstances and desires determine which option is best.
  • Charitable Remainder Trust – You donate assets to the trust and receive investment income during your lifetime. The charity gets the capital upon your death.
  • Donor-Advised Fund – Open a fund and guide where grants go. 

Many charities offer “Giving While Living” programs that enable you to donate now and leave a gift in your Will.

This creative approach provides funding for programs you’re passionate about during your life while still planning a legacy for the future. You’ll gain the satisfaction of seeing your philanthropic impact first-hand.

Discuss these and other options with us to find the best fit. 

Tip: Share your charitable wishes with your family so they understand your motivations.

Life Insurance for Charitable Giving

Permanent life insurance is an excellent option for charitable estate planning, which offers affordable premiums and a guaranteed death benefit. You can use it to create or replace the value of your charitable gifts.

You designate the charity of your choice as a beneficiary. This provides them with a large, lump-sum gift at your passing without the costs and delays of the probate process.

Meanwhile, the rest of your assets can go to loved ones without reduction. Life insurance lets you strategically divide your estate between charitable causes you care about and heirs who depend on you. For example, if $500,000 of your estate is designated to charity, you could instead buy a $500,000 life insurance policy with the charity as beneficiary. With proper planning, the policy should cost less than $500,000. If it costs $200,000, this leaves an additional $300,000 to your heirs that would have otherwise been donated while still giving the same amount you initially planned to charity.

Explore life insurance to supplement your charitable bequests. We can customize options based on your budget, timeline and goals. 

Start Planning Your Charitable Impact

The next step is meeting with us virtually. Share your passions and the causes you wish to support. Explore options like charitable bequests and life insurance to integrate thoughtful philanthropy into your planning.

Provide for your loved ones and also advance the greater good. Create an inspiring legacy of compassion through your estate with life insurance.

Learn how Will Power helps you include a gift to charity in your Will and about the pros and cons of donating life insurance.

Tags: quotations, will power