Planned giving is a systematic way of pre-planning your estate so that the taxes are minimized and the estate value is maximized, in a tax legitimate and efficient manner.
It’s never too early to do estate planning....
Estate planning should be done in conjunction with retirement planning... of which charitable giving is a component of both.
Charitable giving allows the donor to contribute to the well being of future generations.
You are not limited to leaving a legacy for your children, there are many opportunities and options to leave a social legacy to your community without adversely affecting the legacy to your children.
A look at a few of the options...
Gift of Cash - The organization can begin to use the gift immediately in its operations. The Donor receives a charitable donation receipt for the full amount for use on their tax return, generally realizing a 46% return on their taxes.
Gift of Publically Traded Securities - The organization can sell the securities and begin to use the gift immediately or can sell them as needed. The Donor receives a charitable donation receipt for the fair market value at the time of the gifting. If the Donor had sold the securities and donated the money, the Donor would have to pay capital gains tax on the disposition of the securities. There is no capital gain tax if the securities are gifted to a charity.
Set up a Life Insurance Policy where the charity is named as the owner and irrevocable beneficiary - The organization will have immediate access to the cash value of the policy or the proceeds at the death of the Donor. The Donor receives an immediate charitable donation receipt for the cash value of the policy and any future premiums paid. This option allows for a small outlay leading to a larger future gift.
Life Insurance Policy where the charity is named as the beneficiary, but not the owner - The organization will receive the proceeds at the death of the Donor and the Donor is able to change the beneficiary designation at any time. The Donor’s estate will receive a charitable donation receipt for the full value of the proceeds of the policy. This option also allows for a small outlay leading to a larger future gift.
Naming the charity as the beneficiary of registered monies (eg RRSP’s, RIF’s) - The organization receives the capital remaining in the RRSP/RIF at the time of the Donor’s death. The Donor’s estate receives a charitable donation receipt for the amount of the capital transferred. This receipt will help offset the tax owing on the de-registration of the capital at the time of death.
Leaving a bequest to the charity in your will - The organization will receive the gift during the process of winding down the estate. The Donor receives a charitable donation receipt for use on the final tax return. It is best to express these gifts in terms of percentages, rather than fixed dollar amounts.
Gift to the charity of shares in a privately held corporation, of real estate, of Charitable Remainder Trusts or of residual interest in real estate or artworks - The organization receives the gift and may hold onto it or dispose of it as they choose. The Donor receives charitable donation receipt for fair market value or appraised value and would have an income inclusion equal to the half the capital gains of the property. These are more complicated gifts and require more explanation than can easily be provided here. Please talk to your expert to explore these possibilities further.
An organization supporting and promoting philanthropic giving in Manitoba and is endorsed by The Manitoba Bar Association, Law Society of Manitoba, Certified General Accountants, Certified Management Accountants, Estate Planning Council of Winnipeg to name but a few. 942-5552
Dan Potvin, Director of Stewardship & Development,
Archdiocese of Winnipeg, 452-2227 extension 228