Types of Planned Gifts
Gifts Made By Will
Bequests are gifts made through your Will. You can leave a specific amount of money, a piece of property or a portion of your estate residue. Since you can claim up to 100% of your income on your final tax return and carry back any excess to the previous year, the tax relief created by an estate gift can be significant. The cost for an experienced estate lawyer to create a well-drafted, valid Will is small, given the peace of mind provided by knowing it is done properly.
The most flexible wording is to leave your gift “to the Foundation of Chatham-Kent Health Alliance for its Highest Priority Needs.” Alternately, you may designate your gift to a specific area, in which case we can work with your lawyer to create the correct wording. Most importantly, sharing your intentions will allow us to thank and recognize you now, while also allowing us to plan for the future.
Planned Giving and Endowment
Bequests can be endowed for a specific purpose or added to the general endowment fund. Endowed funds provide a firm foundation for the future because the original gift is never spent – it remains intact as a legacy forever. Only the income is expended, either for your specified purpose or our hospital’s highest priority needs.
Life insurance can benefit both the donor and Chatham-Kent Health Alliance when the Foundation is named beneficiary. Upon death, the proceeds pass outside your estate, providing both privacy and protection from estate administration taxes (formerly known as probate fees) and the charitable tax receipt issued will alleviate the tax burden on your estate. If you donate a new or existing policy during your lifetime, irrevocably making the Foundation both owner and beneficiary, you will receive a charitable tax receipt from the Foundation of Chatham-Kent Health Alliance for any cash surrender value on the policy and for any future premiums you pay.
Charitable Gift Annuities
A Charitable Gift Annuity is an attractive option for donors, usually in their seventies and older, to benefit a charity and collect income at the same time. Part of the donor’s gift (typically 25%) is an immediate gift to the charity for which a tax receipt is issued. Our Hospital purchases a commercial annuity on behalf of the donor with the remaining funds, which pays the donor income, largely tax exempt, for their lifetime.
This strategy features two components: life insurance and a life annuity. First, life insurance is purchased for a value equal to some of your fixed-income investments (e.g. GICs). This value is then liquidated from your fixed-income investments. With the proceeds, a life annuity is purchased to provide a guaranteed income payment for life and fund the ongoing insurance premiums. Finally, the insurance policy is irrevocably gifted to charity, which makes itself beneficiary and generates a tax receipt for any future premiums. The donor benefits from a predictable income stream while the charity receives the insurance proceeds.
Donations of Securities “In Kind”
Donating certain publicly traded securities “in kind” (or in their current form, unsold) to the Foundation, either while you are alive or through your estate, will exempt you (or your estate) from paying tax on the capital gain triggered by the donation. In addition, you receive a charitable tax receipt for the fair market value of the gift, making this strategy an exceptional way to maximize your tax savings while supporting the Foundation and CKHA in a significant way.
Please have your broker call us at 519-436-2538 to advise us of your securities donation. We will provide the brokerage account information and answer any questions. You can also learn more by clicking here.
Donations of RRSPs and RRIFs
When the Foundation is designated as beneficiary of your RRSP or RRIF, the proceeds are paid directly, bypassing your estate and avoiding estate administration taxes. The charitable tax receipt issued will eliminate a considerable amount of the significant tax generated by the realization of your registered plan on your death.
Other Gift Planning Methods
There are other planned gifts such as Charitable Remainder Trusts and donations of real estate or cultural property, which are more complex. Our Manager of Development can work with you and your advisors to create this type of meaningful gift.
The information contained here is correct at the time of writing, is general in nature and is not intended to represent legal or tax advice. We recommend that you consult your own tax and legal advisor(s) with respect to your particular circumstances when doing your tax or estate planning.