Giving to charity is a practice that can extend well beyond our own lifetime. Photo from Wikimedia

The many ways of giving

  • November 3, 2021

An estate gift to your parish or favourite charity can be your way of expressing what was important in your life. Here are some ways people can remember charities in their estate plan (and it’s a good idea to let them know so it can be noted in their files).

  • Bequests: A bequest in a Will is eligible for a tax receipt to your estate. Some of the most common types of bequests are residuary (in which a percentage of your estate is gifted to the Church after all other obligations have been met) and specific (in which a specific dollar amount is gifted for a specific purpose). Seek advice from a lawyer.
  • Gifts of RRSPs and RRIFs: It is possible to donate Registered Retirement Savings Plans and Registered Retirement Income Funds to charity and receive a tax receipt. Great care must be taken before doing so as there are tax consequences.
    You should always consult a financial professional before making this or any other type of estate gift.
  • Endowments: An endowment is a gift made to last. The original capital of the gift is preserved in perpetuity while the income that the capital generates is used to fund charitable programs. An example of an endowment is the ShareLife Legacy for Life endowment fund which generates an annual income for the needs of ShareLife agencies in the Archdiocese of Toronto.  
  • Life insurance: As these gifts can be technical, it is necessary to consult a life insurance agent. (If you are a member of the Knights of Columbus, consider speaking with your Fraternal Benefits Advisor.) Depending on how the policy is structured, you can elect to receive a tax receipt on an annual basis or wait until after your death, in which case the receipt is issued to your estate. The gift can consist of a new policy or an existing one. 
  • Listed securities: A gift of securities can reduce taxes because securities that have appreciated in value and are donated directly to a Canadian charity escape capital gains tax.
  • Gifts of real estate: Real estate can be donated, but it is important to note that when the property is not eligible for the principal residence exemption (i.e. it is not the primary residence), capital gains are taxable. Donors receive a charitable tax receipt for the fair market value of the property on death.
  • Other types of in-kind gifts: These can include fine art, coin and stamp collections, jewellery, valuable sports memorabilia, vehicles, etc.
    The charity will most likely look to convert the gift into cash. The tax receipt issued will be for the fair market value of the donation (not the insured value). It is important to note that the charity may require an independent appraisal, the cost of which is customarily covered by the donor.

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