For some, planned giving is an integral component of philanthropy, tax and estate planning. As part of an overall strategic plan, Zenith Private Wealth Counsel can develop a planned gift strategy that maximizes tax relief while allowing you to support your favourite charities. Examples of planned giving approaches include…
Leaving a bequest in a will is the most popular and easiest way to make a planned gift. Many donors feel that they can’t afford to make a significant gift to their favourite charities during their lifetime. However, a bequest enables a donor to accomplish this in the future with little or no effect on current finances, while significantly reducing the taxes payable by an estate.
Donating publicly-traded stock, mutual funds and options that have appreciated in value can be very tax advantageous. A donor can avoid having to pay expensive tax on capital gains when the securities are donated directly to the charity instead of selling the securities first.
Life insurance provides an effective way of making a powerful gift with big benefits. Small annual payments can mean a substantial gift. A new or existing policy can be donated. A gift of life insurance can be an affordable way of making a significant donation to supporting a charity while preserving assets intended for family and loved ones.
Retirement Plans (RRSPs/RRIFs)
It is now possible to make a significant future gift to a charity, while greatly reducing taxes, by naming the charity as a direct beneficiary of RRSP or RRIF proceeds, outside of an estate. Recently, the federal government has made it very easy and convenient to make a future contribution of retirement fund proceeds, including RRSPs and RRIFs. Contributing the proceeds of a retirement fund provides a donor with an opportunity to make a significant gift to a charity, receive a donation receipt for the full value of the proceeds and use the resulting tax credits to offset taxes payable by the estate.
Residual Interest Gifts
A gift of residual interest can produce tax benefits now while allowing a donor to retain the rights to enjoy the assets during your lifetime. Examples include gifts of a personal residence, or valued artwork settled under a charitable remainder trust agreement. In each case, the donor will receive a donation receipt for the present value of the remainder interest.
Gifts of Property
Outright gifts of property such as real estate, artwork and jewellery are accepted ‘in kind’ based on suitability. For these gifts, donation receipts are issued for the fair market value of the gift.
Gift of a Charitable Remainder Trust
A donor can receive a steady income and save on taxes right away while supporting their favourite charity by establishing a charitable remainder trust. This type of trust is set up in a way that assigns the future value of assets in the trust to a charity, but allows the donor or a loved one to receive the income generated from the assets for life or a specified period of time.