Tax-Smart Giving Options
Charity bequest
A bequest is a commitment — often a specific piece of property, a sum of money, or a portion of your estate — made through your will to be distributed by your estate upon your death.
Most people make a bequest when their will is drawn by asking their lawyer to add an appropriate clause.
Benefits:
- A bequest is a tax-effective means of supporting Red Door Family Shelter, for which you’ll receive a donation receipt.
- Your estate may have significant tax savings in the year of death and the preceding year.
- You have use of the asset while you are alive.
- A bequest is revocable and can be changed if your financial circumstances change.
Stocks and Securities
Donating publicly traded stocks and securities is a tax-smart way to support Red Door Family Shelter.
By directly donating publicly traded stocks or securities that have increased in value, you will receive a tax receipt for the full appreciated value and will not be subject to any capital gains tax normally associated with a sale.
The value of your tax receipt will be based on the market closing price on the day Red Door takes legal receipt of your stock or securities into our brokerage account.
Benefits:
- Publicly listed stocks and securities donated to Red Door Family Shelter are exempt from capital gains tax, so you’ll be able to give more and reduce taxes compared to selling your stocks and donating the proceeds.
- With a higher donation value, your estate will benefit from higher charitable tax credits.
Life insurance
You can donate life insurance by transferring ownership and beneficiary status of an existing or new policy to Red Door Family Shelter, or you can simply name Red Door as the beneficiary of your policy.
Benefits:
– A gift of life insurance is an affordable way to make a difference.
– You’ll receive a tax receipt for premiums paid after the date of transfer.
– A modest annual premium paid over time will result in a significant future legacy.
– The resulting tax credit will reduce estate taxes and increase the after-tax value of your estate for other beneficiaries.
How to set up a life insurance gift:
- You can either give an already paid-up policy, give an existing policy on which premiums are still being paid, purchase a new policy and transfer ownership to us, or retain ownership of a policy and name us as the direct beneficiary.
- To arrange one of these options, please speak with your insurance advisor.
RRSP or RRIF
Gifts made through registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs) are a popular way to give, as this reduces taxes owed.
Benefits:
– Your estate will receive a tax receipt for the full RRSP/RRIF donation amount, offsetting taxes owed on either of these funds at the time of death.
How to set up a RRSP or RRIF gift:
Speak to your financial advisor about your options.
Additional resources
The Canada Revenue Agency provides detailed information and brochures regarding tax implications of legacy giving. You can research policies related to charities through the Charities and Giving page.
The Department of Finance Canada offers current federal information that may affect your taxes through budget updates and tax bulletins.
