Cash Gifts: A gift of cash (or cheque) is a simple form of gift that provides the donor with a receipt that can be used to reduce taxes in the year of the gift or carried forward for up to five years.
The 5% Solution: The first consideration in making a will is to ensure the future of your loved ones. At the same time you may wish to help your community. The 5% solution is to provide 5% of your estate to charity. It is estimated that the average estate of persons 65 or older is $300,000. This would suggest a charitable gift of $15000. A donation from your capital becomes the community's capital.
Gifts in Kind: A gift in kind is property transferred by a donor to a charity. Common examples are real estate, stocks, bonds, jewelry, art work, vehicles and household furnishings. The donor receives a tax receipt for the fair market value of the gift, while the charity may use or sell the gift to generate funds for its charitable activities. With gifts in kind that have appreciated in value, donors should seek professional advice on how to minimize exposure to taxes on capital gains.
Gifts of Securities (Stocks, Bonds, Mutual Funds): Recent changes to the capital gains tax rules make it very attractive to make a gift to a charity of appreciated securities. There can be tax advantages to a donor in giving securities rather than cash, due to the new lower rate of capital gains tax that would apply.
Bequests: Bequests are gifts by Will or Codicil of a specific sum of money, specific property or a percentage of an estate at the end of a donor's lifetime. In estate planning, donors should provide first for their family and loved ones, and then think of the community benefits possible from a charitable gift. The estate receives a donation receipt for the value of the gift. Gifts of this type are extremely important to help community foundations grow.
Life Insurance: A donor can name a charity as the beneficiary of a life insurance policy, and receive a donation receipt for premiums paid. On the death of the donor, the proceeds of the insurance policy pass directly to the charity, and avoid probate fees and potential challenge by family members.
Trusts: Another form of gift involves the creation of a trust. A simple illustration of how a trust can work is this: a donor irrevocably transfers a property (a work of art for example) to the benefit of a charity, but retains the right to use and enjoy it during the remainder of his lifetime or a specific period. On the death of the donor or the expiry of the period, the charity receives the property. Creating a trust can be complicated, and legal advice is essential.
Gifts of Retirement Plan Accumulations: Gifts of RRSP or RRIF accumulations can, in some circumstances, be made to charity, with resulting tax benefits to the donor's estate. By naming the donor's estate as the beneficiary of the RRSP or RRIF and using the funds in the estate to make a bequest to charity, the tax credit can offset the tax payable on the funds.
Regardless of the form of planned gift you make to the Parksville-Qualicum Community Foundation, you will be leaving a legacy that will stay in, and strengthen your community. Your financial or legal advisor can help you decide which form of gift to make and help implement your plan.
Helping YOU help YOUR Community.