In July 2018, my clients Mark and Mira Shnier were introduced to the Jewish Foundation by their family advisor, Jordan Caplan. This began a journey of philanthropic generosity and legacy-building, and a relationship in which Mark and Mira placed the Jewish Foundation at the centre of their strategy for giving. In fact, there were three distinct and beneficial ways Mark and Mira took advantage of having a Fund at the Jewish Foundation.
Establishing a Fund
First, let me introduce the Shniers. Mark and Mira were already philanthropically minded when they first met the Jewish Foundation’s Janice Benatar, VP, Philanthropic Leadership. As they explained to Janice, they have been very fortunate in their lives with successful businesses, as well as wonderful children and grandchildren. They sold their family business several years ago and started investing in real estate. Mark is an IT consultant, and Mira now works with Mark after years of working at IBM. They are an extraordinary family who want to give back to the areas that are important to them through their wealth.
Several years prior to being introduced to the Jewish Foundation, Mark and Mira had invested in Skyline Real Estate Investment Trust (REIT). The REIT had gained enormous value and would eventually be subject to a significant capital gains tax upon sale. Knowing about the impending tax liability and given their philanthropic goals, the family loved the idea of having a Family Fund that could minimize tax and give back to the community without the struggles of managing, administering, and investing in one. They were delighted to learn that donating these shares would result in elimination of any capital gains tax, along with a donation receipt for the full value of the REIT.
At first, Mark and Mira had explored opening a Donor Advised Fund through their longtime bank. Jonathan (Jono) Halpern, their accountant and family office advisor, suggested they consider the Jewish Foundation. After meeting with Janice, they decided instead to open a Fund at the Jewish Foundation. Why the Jewish Foundation? First, was the obvious expertise of the Jewish Foundation in the needs of the Jewish community and Jewish philanthropy. Second, the Jewish Foundation’s connection with institutions the Shniers valued—like Bernard Betel Centre, where Mira volunteered, the JCC they had attended and TanenbaumCHAT where their kids went to school. Third, the strong and stable investment returns and lower fees. Mark and Mira were keen for their principle to be maintained over time so their children could inherit a significant Fund.
Working together, the Shniers, the Jewish Foundation, and Skyline REIT created a process for accepting gifts through the REIT. As this REIT is private and not publicly traded, the Jewish Foundation needed to become a client in order to receive gifts. This was a relatively simple process given the REIT’s monthly valuation reports and the fact it can be made liquid quite easily. All this work culminated in Mark and Mira establishing two separate Funds: one for themselves, and a collective Fund managed by themselves and their siblings in the names of their parents, Phil and Shirley Shnier.
Donating Life Insurance
This might have been the end of the story, had it not been for their accountant, Jono Halpern. During the Covid-19 pandemic, through his attendance at one of the Jewish Foundation’s seminars, Jono learned about donating existing gifts of life insurance policies to charities. In turn, the donor would receive a tax receipt for the fair market value of the policy while leaving a meaningful legacy gift to the community. He shared this concept with Mark and Mira, who loved the idea of donating their paid-up existing insurance policies to the Jewish Foundation. They had recently learned that cashing in their policies would result in a tax liability, and they were reluctant to pay tax on policies they had paid premiums on for years. The strategy of donating the policies and the accompanying tax incentive was much more attractive. As a result, near the end of 2020, two gifts of life insurance were transferred to the Jewish Foundation.
A Gift Through Their Will
Two Funds and two gifts of life insurance—the Shniers now had a multi-faceted and beneficial relationship with the Jewish Foundation. But once again, this isn’t the end of their story. This is where I come in. As the Shniers’ lawyer, together with Jono Halpern, we reviewed their wills together to make changes. They were looking to continue to support multiple charities through their wills, each of which would, on receipt of the gift issue a charitable receipt to the estate following their demise. To simplify the process, we suggested that instead of leaving gifts to various charities through their wills, they might consider leaving a single bequest to the Jewish Foundation. As a result, their executors would only need to deal with one charity and receive one tax receipt. At the same time, any additional changes to the entity that will ultimately receive the funds made in their lifetimes could be done by amending the Donor Agreement through the Jewish Foundation rather than a change to the will, although that would still be required if they wish to change the amount of the gift.
The case of Mark and Mira Shnier is an excellent example of multiple advisors and professionals—lawyers and accountants and insurance professionals working together in the best interests of their clients in a way that offers those same clients an incredible way to make a lasting impact.
What a legacy it is. The Jewish Foundation creates sources of funding for the Jewish community for years to come. At the same time, this method of giving offers simplicity when compared to a private foundation directly managed by the principals, with all the legal complexities that arise from such a Fund. At the same time, the tax benefits are numerous. All the various methods the Shniers used to invest in the Jewish Foundation offered such benefits. With the Jewish Foundation’s well-established history of strong returns, Mark and Mira can be confident their children will inherit this legacy, and it will provide benefits for the Jewish community for years to come.
I want to extend my gratitude to Mark and Mira Shnier for allowing me to share their story, so that others might benefit from it and discover what extraordinary philanthropic impact is possible by working with the Jewish Foundation.
About the Author
Brian Cohen is a partner and lawyer in Gowling WLG's global Private Client Services Group. He assists clients in the areas of estate planning, trusts and personal taxation, with a focus on advising high net worth individuals on succession planning alternatives. Brian is a past recipient of the Ontario Bar Association's Hoffstein Book Prize in Trusts and Estates. He is listed as a leading lawyer in Chambers HNW, Best Lawyers in Canada, Acritas Stars and the Canadian Legal Lexpert Directory.