Thoughtful Legacies for Children and Youth
What’s important to you and your family? If security, permanence, love and safety for children and youth come to mind, then strategic planning for your philanthropy can make a difference. It makes good sense to give wisely and to maximize your tax benefits. Canada has some very generous rules and tax laws when it comes to charitable giving both during life and through your estate, but they can be complicated.
You can include the security of a loving permanent home and family for children and youth as part of your personal financial strategy. Thoughtful generosity can transform a child or a youth’s life; it can change the world.
You may also be asking what donations have to do with your wedding, birthdays, mother or father’s day, anniversaries, family celebrations and other events! What can you do different at these events to help children that need families? Well, it’s easy! You can help create a child’s future through an adoptive family! You can change a child’s life! Ideas include:
- A note on your dinner tables announcing that instead of wedding favors you and your partner have decided that on this special day that you create your future, you have chosen to help a child who needs a family create their future, by donating the favor money to CHOICES instead.
- You can ask for donations instead of gifts
- You can donate instead of sending a gift
- You can donate as a family to celebrate a special event
We welcome your donations to enable the continuing work of CHOICES Adoption & Counselling Agency. Donations are tax-deductible in Canada. If you are considering a gift from your life savings and investments, we want you to have the peace of mind that your decisions are well informed. When you give to CHOICES, we want you to know that you have made a difference and that we are accountable to you.
You can donate to CHOICES Adoption & Counselling Agency by the following methods:
Please make your cheque or money order payable to “CHOICES” and mail to:
CHOICES Adoption & Counselling
100-850 Blanshard Street
Victoria, BC, Canada
Sustaining Donors make monthly contributions to CHOICES through a pre-authorised withdrawal, arranged with the donor’s bank. All information remains confidential.
Sustaining Donors provide a steady income toward the work of CHOICES, which greatly benefits the long-term planning and commitments of CHOICES regarding projects and orphanage work. Sustaining Donors receive our quarterly newsletters and our Annual Report.
To join the Sustaining Donor Program, call us at 1-888-479-9811.
Planned Giving is one of the most powerful philanthropic tools available to you today. It’s also one of the most popular. The benefits are immediate and far-reaching.
Planned giving is, in essence, deciding in advance what happens to your estate. It puts you in control. Whether its cash, securities, life insurance, real estate or gifts in kind, a well-planned gift ensures your legacy makes a statement about the things that are important to you. Through CHOICES Planned Giving Program, you can fund long-term programs that benefit children, youth and their families. We invite you to ensure the best possible future for children by considering a planned gift to CHOICES. A planned gift to CHOICES is, of course, a tremendous benefit to the waiting children, the families and the agency.
There are as many reasons to give as there are givers. But whether your reasons are altruistic or simply tax-related, the benefits of planned giving are powerful ones.
- Satisfaction – Knowing that you are giving back to a program or cause that holds special significance for you.
- Control – Reducing the risk that your wishes will be hindered by circumstances beyond your control.
- Peace of mind – Ensuring that family and financial matters are resolved privately.
- Convenience – Putting your investment in the hands of others, so you don’t have to worry about ongoing decisions.
- Security – Finalizing your charitable choices now instead of later – or never. Too many people postpone or never realize theirs.
- Financial – Lowering your current taxes and/or lowering the taxes your estate will be required to pay.
Ways of giving
Everyone benefits from the power of a planned gift – you, your family and your cause. Of course, we want to ensure that each of these groups receives the maximum benefit possible, which is why CHOICES offers a wide range of planned giving arrangements. Which way of giving best suits your goals?
The easiest way for you to assist CHOICES is through your will. The agency can accept and provide charitable receipts for both cash bequests and gifts in kind. We can also assist with drafting the bequest. By remembering CHOICES in your estate planning, you can help to ensure that our MISSION to work both locally and globally toward every child having a permanent, loving family and a safe, nurturing home and community will be maintained well into the future. Bequests to CHOICES ensure a solid financial foundation which will continue to support children and youth in finding permanent families and supporting them, as well as supporting birth families and humanitarian aid to orphanages around the world.
Drafting your will to include a charitable bequest is an easy process and should always involve the proper legal assistance. A well-drafted will is an invaluable document and relatively inexpensive when accompanied by the peace of mind that your assets will be well taken care of when you die. If you already have a will, you can easily add a codicil making a bequest to CHOICES. Donors can direct a specific amount of money in a legacy or a percentage of the estate residue to CHOICES. A bequest may also include other types of assets such as securities or properties. The tax receipt for a bequest goes to the donor’s estate. A bequest can be immediate or deferred. A deferred bequest is often made by a testamentary trust. Some or all of the deceased’s assets will be placed in a trust. The income from the trust will be paid to his/her spouse or other dependents for life. The trust will be dissolved at the death of the last surviving beneficiary and the remaining assets in the trust will be passed to the Society.
Charitable bequests enable donors to minimize tax liability on their estates. It also provides donors full control of their assets during life.
Normally a donor can claim a tax credit for up to 75 per cent of their annual income for charitable donations. However, in the year of death and the year preceding, the limit is increased to 100 per cent. If the bequest consists of gifts of appreciated property such as securities or real estate, additional tax credits may be applicable.
A contribution made by way of beneficiary designation such as an RRSP, RRIF or an insurance policy is also eligible for a tax receipt. In the case of RRSPs and RRIFs, the funds used to make the gift are also taxable upon death. If the whole proceeds of an RRSP or RRIF are donated to a charity, the tax credit might be able to completely offset the taxes due upon death.
To assist in issuing a receipt to the estate when the gift is realized, it is helpful if the donor can provide CHOICES a copy of the clause in his/her will pertaining to the bequest when the will is drawn. Your lawyer and accountant are the best people for you to work with in making an important decision such as making a bequest.
A powerful gift with big benefits. Small annual installments can mean a substantial gift for CHOICES, plus your estate is not affected and the gift is not diminished due to taxes, probate or administration fees. Choose to donate with an existing policy or a new one.
Life insurance is a product which is purchased for as many reasons as there are individual policy holders. You may have purchased a life insurance policy for your child’s education that was not used, or perhaps you have an old life insurance policy purchased for you by your parents when you were a child. These policies could make a wonderful gift to CHOICES, and provide you with significant tax savings.
Naming a charity such as CHOICES as the owner and beneficiary of a life insurance policy can entitle you to income tax credits on premium payments or an income tax receipt for the cash value of an existing policy in the year that it is donated. While you may no longer need the policy for the purpose which it was originally purchased, it could provide you with a means of receiving considerable savings on your income tax or on the distribution of your estate.
There are several ways you can use life insurance to make a gift to CHOICES. You can donate a policy you own but no longer need, or buy a new one as your gift. Alternately, if you have other assets you’d like to contribute, you can use life insurance to replace the value of those assets for your heirs.
CHOICES is also able to accept donations of real property such as stocks, bonds, and other assets. Gifts in kind may be made as outright gifts, through a will or in trust. Donating appreciated stocks, bonds and mutual fund units is the most tax-effective way to make a gift.
Donors can turn their investments into gifts for CHOICES. When individuals sell an appreciated stock, they are required to pay tax on 50 per cent of the capital gains, but if they donate it to CHOICES, they pay tax on only 25 per cent of the gain.
Whether you donate cash or appreciated securities, you will receive a tax receipt that creates a tax credit. An extra tax incentive available for gifts of appreciated publicly listed securities makes stocks the least expensive way to give. Donors receive a tax credit for their gift and the extra tax incentive provides additional savings of up to 11 cents on every dollar donated.
The donation of qualifying shares purchased through employee stock options would be treated in a similar manner as a gift of publicly listed securities. These donations are therefore eligible for reduced capital gains inclusion rates providing the shares are donated within 30 days after their acquisition and in the year they were acquired.
If you donate your appreciated securities to CHOICES you pay tax on only 25 per cent on capital gains. Consequently, you will also receive a tax credit that will lead to additional personal savings of up to 11 cents on every dollar donated. Qualified shares acquired through employee stock options can also be donated to CHOICES and are eligible for reduced capital gains inclusion rates too.
A high potential option – both for the amount you can give and the tax benefits you receive. You simply provide in your will for the same amount to be bequeathed to CHOICES.
Perhaps not the traditional way of giving, but a very effective one nonetheless. Land or buildings, commercial or private, make excellent charitable gifts. The property can either be used by CHOICES or sold, with the proceeds used for purposes designated by the donor. You have the satisfaction of making a major gift to the CHOICES now and receiving an immediate tax benefit, yet you continue to use and enjoy the gift property for the rest of your life.
A gift of residual interest with retained life use most commonly involves a donor’s principal residence or other personal real estate, such as a cottage or vacation property. When a gift of residual interest is made, the property is transferred irrevocably to CHOICES, but the donor retains its use for their lifetime or for as long as the life of the donors’ spouse (after the death of the donor).
When the transfer is made, the donor is entitled to a charitable tax receipt for the present value of the ‘residual interest’ – the value, in today’s dollars, of the property that CHOICES will receive upon your death. This is an actuarial calculation based on the current fair market value of the property, your age and the current discount rate.
Residual interest in a personal residence can be an appropriate gift, but in fact, other property you own and use may also be a likely candidate. In this case you will be taxed on 50 per cent of the capital gain attributable to the residual interest, but the tax savings from the donation receipt will always more that offset the tax on the gain.
Charitable Remainder Trusts
A charitable remainder trust can be created during life or by a person’s will. It can be a very effective way to make a significant donation, provide a guaranteed income stream and have the security of professional trust management.
A charitable gift annuity or remainder trust is known as a gift that gives back. You as the donor make a contribution to CHOICES, and in exchange for your donation, CHOICES will purchase a commercial annuity from a licensed insurance company. The amount of your annuity depends on your age and the size of your contribution, but the rate is almost always higher than what you now get from your investments, and it is guaranteed.
The income from your annuity will continue for as long as you live, no matter what happens to the economy or to interest rates. If you are married, you may select an annuity that continues as long as either spouse lives.
Your gift annuity brings you another bonus: depending on the age at which you take out the annuity, a part, or all of each payment will be tax free. In some cases, your donation is also entitled to a charitable tax receipt which will result in tax savings on your income tax return.
You may be wondering how this constitutes a gift to CHOICES. Essentially, CHOICES will use a portion of your contribution to purchase a commercial annuity. The balance remaining becomes the gift portion of the total contribution. You may elect to have these funds used by CHOICES for immediate needs, or you may choose to invest the funds until they reach the amount of your original overall contribution
Gifts of Shares from Private Companies
Today, many people hold much of their wealth in shares of private companies. If you are in such a position and want to make a significant donation to CHOICES, it could be more advantageous to donate shares or property through your company. If you wish to donate stocks or shares, please contact our advisor:
Associate Investment Advisor and Financial Planner
Tel: (250) 356-4972
What you need to know
Bequests are tax creditable and are not subject to estate taxes or succession duties except in the province of Quebec. Revenue Canada regards such gifts by will as having been made in the taxation year of the person’s death. The taxable income of your estate can therefore be reduced by the amount of your bequest to the extent of the maximum allowable deduction for the current year.
All bequests should be given free from restrictions based on national or ethnic origin, colour, religion, sex, age or mental or physical disability.
Endowment and bequest funds held by CHOICES are pooled for investment purposes. All pooled funds share in both capital growth and annual income from earned interest.
Making a planned gift to CHOICES is easier than you think. For more information on planning a gift to CHOICES please contact Holly Allen, firstname.lastname@example.org, 888-479-9811.