Catholics can give gifts to the Church in the form of securities.

Save taxes through the gift of securities in your will

By  Catholic Register Special
  • November 1, 2014

When it comes to giving to the Church, the adage that cash is king is not necessarily true. 

Rudy Fernandes learned this truth long ago. That’s why the Toronto parishioner makes his parish offertory, special collections and other charitable gifts to the Church using stocks and mutual funds. 

“Unfortunately, most people don’t know that they can support the Church by gifting securities,” he wrote in an e-mail. “They have no clue as to how to proceed and those who know feel that it is very complicated — not true!” 

Fernandes fills out a simple form, usually once a year, that indicates the amounts of his gifts and where he wants them allocated. Once the securities are received by the archdiocese, they are immediately sold. Then cheques in the amounts Fernandes allocated are mailed to his parish, his favourite archdiocesan charities and other recipients he designated. Finally, Fernandes is mailed a tax receipt. 

The only fee he incurs on the sale is a brokerage fee, but he gets a tax receipt for that as well. 

“Everyone wins!” he said. 

Securities can also be bequeathed to the Church and other charities in a will. But you need to be careful. A mistake people sometimes make is to bequeath the cash proceeds from the sale of the securities, rather than bequeathing the securities themselves. It is an important distinction. 

The best way to handle this is to leave instructions for your estate to simply gift the securities directly to the Church instead of selling them. That way, your estate saves taxes because the government allows you to donate appreciated securities directly to a Canadian charity without having to pay any capital gains tax. 

The key is to leave specific instructions for your estate trustee so they are aware of your wishes. He or she must transfer the securities directly from your securities’ account to the charity’s account (often referred to as an “in-kind transfer”). The tax receipt issued to your estate will be for the value of the securities when they enter the charity’s account. The charity will then sell the securities and receive the cash proceeds of the sale. 

Also, it is a good idea to contact your charity of choice in advance to make sure they are set up to receive gifts of securities. 

In the Archdiocese of Toronto, if you are contemplating a donation of securities to the Church, it can be done through the development office. It will handle the transaction and pay out the proceeds as you designate — be it to your parish or favourite archdiocesan charity such as ShareLife, The Shepherds’ Trust, St. Augustine’s Seminary, St. Michael’s Choir School, etc. 

Donors are free to break up their securities gift as many ways as they like for any amount they like. There is no fee to do this. 

Also, a smart estate plan does not have to wait until after your death to go into effect. It may be more advantageous from a tax perspective to begin making securities gifts “in-life.” A qualified estate planner can advise if this approach is better than making a one-time gift through your estate. 

Before you gift securities, you are advised to first contact your charity of choice. In the Archdiocese of Toronto, contact the development office at (416) 934-3411 or e-mail: development@archtoronto. org. 

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