Leave a LegacyTM Quebec is a program launched by the Canadian Association of Gift Planners (CAGP), which encourages the Quebec population to make a planned gift to a charitable organization, whether in the context of financial, tax or estate planning.
The goal is to maximize the economic benefits of bequests or other planned gifts.
Planned giving is above all a gesture that comes from the heart. It is important, however, to be informed about the tax regulations that will be applied. The more structured your planned gift, the greater its impact.
Below you will find brief definitions of each of the main types of planned donations, which appear on the Leave a Legacy website. For more information, we recommend that you consult this site, along with your legal or financial advisor and favourite organization.
A bequest involves making a significant donation, by means of a will, to one or more organizations. This is one of the simplest and most accessible ways to plan a gift. There are many ways to do this:
- specific bequest (a fixed amount or identifiable asset);
- residual bequest (all or a percentage of the remainder of the estate after the payment of debts and specific bequests);
- designating a charity as contingent beneficiary in the event of death of the primary beneficiary;
- universal bequest (all of the assets, sometimes divided among many beneficiaries);
- designating a charity as beneficiary of an RRSP, RRIF or life insurance policy;
- a simultaneous death clause whereby the charity inherits, should all the beneficiaries die at the same time.
In each case, a tax receipt will be issued for use in the final tax return. The fiscal advantages that follow from charitable bequests can dramatically reduce the taxes to be paid out by the estate.
There are various ways of making a gift of life insurance. The type of gift will depend on your objectives, age and family situation:
- surrendering an existing policy;
- purchasing a new policy;
- designating a charitable organization as the beneficiary of the death benefit.
Whatever method is chosen, life insurance makes it possible to make a major gift while protecting the inheritance of the heir(s).
The gift of life insurance can generate significant tax savings for the donor. In order to benefit from these savings immediately, you must designate the organization as beneficiary and owner of the policy. You will then be issued a tax receipt for the fair market value of the policy, if applicable, and a receipt for each premium payment.
Since your donation is made while you are living, there are no fiscal advantages for the estate.
Real estate: You can donate a family residence to a charitable organization while continuing to use it until the end of your life.
Listed securities: The gift of publicly listed securities, bonds, mutual fund units or other similar securities is one of the most fiscally advantageous ways to make a substantial donation to a charitable organization since the donor will avoid paying tax on the capital gain.
Charitable annuities: A charitable gift annuity consists of a donation of money or other assets to a charitable organization in exchange for guaranteed earnings for life or for a determined period of time.
Charitable remainder trusts: Creating a charitable remainder trust allows you to make a substantial donation, while still receiving the income generated from the asset you are transferring.
Endowment Funds: Endowment funds, when used as a type of planned gift, consist of transferring an important sum to a charitable organization and designating the particular cause which will benefit from the income generated by the capital transferred as a donation.
All types of assistance are greatly appreciated, but find out whether your gift can have a long-term impact, as in the case of an endowment fund.