Sow today the harvest of tomorrow

Leaving a specific bequest means giving an amount or percentage of an asset, property, securities (shares, RRSPs, RIFFs) or of a life insurance policy. (Example: I bequeath to CECI, registered charity number 118846575 RR 0001, the sum of $....)

Leaving a residual bequest means giving the remainder of the estate after all debts and specific bequests have been paid. This type of legacy can be bequeathed to a single beneficiary or shared among several beneficiaries, as a percentage, or in equal or unequal parts. (Example: After paying my debts and my specific bequests, as enumerated, I leave the residue of my estate to CECI, registered charity number 118846575 RR 0001.)

Leaving a universal bequest means that your entire property is given to one or several people and/or charities. (Example: I leave my property to CECI, registered charity number 118846575 RR 0001, and to my cousin, Denise Tremblay, in a proportion of 1/3 and 2/3 respectively.)

You can also designate CECI as your beneficiary in the event that the primary beneficiary does not survive the donor or simultaneous death. (Example: I leave my spouse, who I designate my sole universal legatee, all of my property. Should he/she pass away before me or die within 30 days of my passing, I designate CECI, registered charity number 118846575 RR 0001, as my substitute universal beneficiary.)

If your living conditions have changed and your life insurance policy no longer reflects your initial goals, you can transfer today that life insurance policy to CECI, which would become the policy owner and the beneficiary when you pass away. At the time of transfer, you will receive a charitable donation receipt for the policy’s fair market value. If the policy is not yet paid-up and you continue to pay the premiums, you will be entitled to a charitable donation receipt for the subsequent payments.

You can remain the owner of your life insurance policy and designate CECI as the beneficiary of the death benefit in whole or in part. When you pass away, a tax receipt for the amount received is issued in the name of the estate, which in return provides a tax credit.

You would like to make a larger contribution in support of CECI’s mission, but your current resources are modest? In this case, you could purchase a new life insurance policy naming CECI as the beneficiary. If you transfer the ownership of the policy to CECI, you will receive a receipt each year for the premiums you pay. If you remain the owner and designate CECI as the beneficiary, a receipt will be issued to the estate’s name in the amount of the policy’s face value. Your heirs may then use it to reduce any taxes owed upon your passing.

Donating securities (shares, bonds, mutual funds or other similar securities listed on the Canadian, American or International Stock Exchange) allows you to contribute to the cause you care about at a lower cost.

For this type of donation to be beneficial from a tax perspective, you must transfer the security directly, and not the proceeds from the sale of the security in question. In fact, since 2006, the Canada Revenue Agency and Revenu Québec no longer tax capital gains when securities listed on the stock exchange are transferred to a registered charity like CECI.

Therefore, in addition to receiving a receipt equivalent to the value of the transferred stocks, you save on the capital gains tax. Of course, the greater the capital gains, the greater the benefit of the direct securities transfer.

Your estate can also donate securities listed on the stock exchange and benefit from the same capital gains tax advantages and the charitable receipt. However, your will must stipulate a donation of this type or enable your liquidator to do so. Make sure that you and your liquidator are well informed on the subject by legal and tax advisors.