Charitable Giving and You

With Eid less than a month away, this is the time of year when our thoughts turn to family and friends, to lives shared and enjoyed, and to the mutual support freely given to each other that has enriched our lives in so many important ways.

You may also be thinking of others less fortunate than yourself during the month of Ramadan who need help and support - and of how you might best give back to your community, a favourite charity or cause. If so, you're far from alone. As Canadians, we have a long and proud tradition of taking positive action for the common good. Each day of each year, hundreds of thousands of us provide vital volunteer support for the many charitable and other non-profit organizations that would otherwise be unable to carry out their good works. And for many Canadians, that support goes beyond volunteerism to charitable giving, either while we live or as a legacy provision in our Wills.

If charitable giving is on your mind, here are some strategies for leaving the legacy you wish to the charity of your choice and to your heirs with minimum taxation, fees or other delays:

Name the charity as beneficiary: Leave a bequest in your Will to a recognized charity and your estate will receive a charitable donation tax receipt that could eliminate all of the income tax on your final tax return and possibly on the return for the immediately preceding year, as well.

Establish a Donor Advised Fund: As the donor, you receive an immediate tax receipt for all contributions made to the donor-advised fund and you also retain the right to advise on how the fund's income (usually called grants) is to be allocated to charity each year - all without the administrative responsibilities or costs associated with establishing a private foundation.

Establish a Charitable Remainder Trust: You donate your capital while you live on the income. The charity has no access to trust capital during your lifetime and all interest and dividends are paid to you as taxable income. Upon your death, the trust assets - known as the remainder - go immediately to the charity. You receive an immediate tax receipt for the "remainder interest" given to the charity by creating the trust.

Donate a life insurance policy now: When you donate a life insurance policy to your favourite charity, it will receive the total death benefit under the policy and you will enjoy certain tax credits.

Establish a Charitable Life Annuity: By making a charitable gift now you will continue to receive a lifetime income from the assets you've donated, for yourself, or for you and your spouse and receive certain tax credits.
Donate publicly traded stocks or securities: Recent tax law revisions have reduced the capital gains tax on gifts of appreciated stocks and securities from 25% to zero - when they are donated to a recognized charity. You or your estate will pay no capital gains tax on donated shares and will receive a tax receipt for their full value.

Establish a Private Foundation: Your foundation will ensure your generosity lives on and can permanently associate your name or your family's name with the causes you've chosen.

If charitable giving is in your future, talk to Ismail Mukri about the charitable giving strategy that makes the most sense for you, your charity and your estate.

Ismail Mukri

MBA, B.Eng, P.Eng, P.M.P.
Consultant
Cell: (613) 797-8536
ismail.mukri@investorsgroup.com
500-2 Gurdwara Road, Ottawa, ON K2E 1A2
Ph: (613) 723-7200 / (877) 421-8779
Fax: (613) 723-0158