Legacy gifts are a wonderful and thoughtful way to helping non-profit organizations in the community.
“Our Legacy gift to Reach Society will enable them to achieve their future goals that help children with disabilities and special needs,” say David and Elaine Bliss. “It is important to us to ensure a better future for these children and young adults so they can be productive members of our community.”
In June 2022, they each committed $50,000 through their wills by naming Reach Child and Youth Development Society as the beneficiary of their life insurance policies.
“Life Insurance is not the only option that makes sense. For many individuals a great source of both wealth and future tax liability exists within their taxable investment portfolios and looking at these together can ensure benefits where the sum is greater than the parts,” said Mark Schoeffel, certified financial planner and a senior investment advisor at iA Private Wealth in Tsawwassen.
Whatever financial vehicle the donor chooses, it is important that that their values are aligned with the services that the charitable recipient offers. Legacy donor funding allows the charity to plan service in the future, informed by the donor’s wishes. In addition, the Canadian Revenue Agency (CRA) offers tax relief to the donor’s estate.
According to the CRA, a gift of a publicly-traded share or stock option (including mutual funds) receive favourable treatment to the donor.
The normal 50 per cent inclusion or taxes of any gain that would normally be realized through a divestiture (sale, gift, death of owner) is set to a zero per cent inclusion. The donor receives a donation credit for the full value of the donation (as at the date received by the charity), and the charity receives 100 per cent of the funds for use.
“The donation of securities that have appreciated in value can serve a two-fold objective of providing a meaningful legacy to a charitable cause close to the donor’s heart and proactively manage the tax impact to a future estate and other eventual beneficiaries,” adds Schoeffel.